House Report 115-161 - VERIFY FIRST ACT

[House Report 115-161]
[From the U.S. Government Publishing Office]

115th Congress } { Rept. 115- 161
HOUSE OF REPRESENTATIVES
1st Session } { Part 1

======================================================================

VERIFY FIRST ACT

_______

June 2, 2017.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______

Mr. Brady of Texas, from the Committee on Ways and Means, submitted the
following

R E P O R T

together with

DISSENTING VIEWS

[To accompany H.R. 2581]

[Including cost estimate of the Congressional Budget Office]

The Committee on Ways and Means, to whom was referred the
bill (H.R. 2581) to amend the Internal Revenue Code of 1986 to
require the provision of Social Security numbers as a condition
of receiving the health insurance premium tax credit, having
considered the same, report favorably thereon with an amendment
and recommend that the bill as amended do pass.

CONTENTS

Page
I. SUMMARY AND BACKGROUND...........................................3
A. Purpose and Summary................................. 3
B. Background and Need for Legislation................. 3
C. Legislative History................................. 4
II. EXPLANATION OF THE BILL..........................................5
A. Verification of Status in United States as Condition
of Receiving Advance Payment of Health Insurance
Premium Tax Credit................................. 5
III. VOTES OF THE COMMITTEE...........................................8
IV. BUDGET EFFECTS OF THE BILL......................................10
A. Committee Estimate of Budgetary Effects............. 10
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority...................... 10
C. Cost Estimate Prepared by the Congressional Budget
Office............................................. 10
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE......12
A. Committee Oversight Findings and Recommendations.... 12
B. Statement of General Performance Goals and
Objectives......................................... 12
C. Information Relating to Unfunded Mandates........... 12
D. Applicability of House Rule XXI 5(b)................ 12
E. Tax Complexity Analysis............................. 12
F. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits............................ 13
G. Duplication of Federal Programs..................... 13
H. Disclosure of Directed Rule Makings................. 13
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED...........13
VII. DISSENTING VIEWS................................................38

The amendment is as follows:
Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Verify First Act''.

SEC. 2. VERIFICATION OF STATUS IN UNITED STATES AS CONDITION OF
RECEIVING ADVANCE PAYMENT OF HEALTH INSURANCE
PREMIUM TAX CREDIT.

(a) Application to Current Health Insurance Premium Tax Credit.--
Section 36B of the Internal Revenue Code of 1986, as in effect for
months beginning before January 1, 2020, is amended by redesignating
subsection (g) as subsection (h) and by inserting after subsection (f)
the following new subsection:
``(g) Verification of Status in United States for Advance Payment.--
No advance payment of the credit allowed under this section with
respect to any premium under subsection (b)(2)(A) with respect to any
individual shall be made under section 1412 of the Patient Protection
and Affordable Care Act unless the Secretary has received confirmation
from the Secretary of Health and Human Services that the Commissioner
of Social Security or the Secretary of Homeland Security has verified
under section 1411(c)(2) of such Act the individual's status as a
citizen or national of the United States or an alien lawfully present
in the United States using a process that includes the appropriate use
of information related to citizenship or immigration status, such as
social security account numbers (but not individual taxpayer
identification numbers).''.
(b) Application to New Health Insurance Premium Tax Credit.--Section
36B of the Internal Revenue Code of 1986, as amended by the American
Health Care Act of 2017 and in effect for months beginning after
December 31, 2019, is amended by adding at the end the following new
subsection:
``(h) Verification of Status in United States for Advance Payment.--
No advance payment of the credit allowed under this section with
respect to any amount under subparagraph (A) or (B) of subsection
(b)(1) with respect to any individual shall be made under section 1412
of the Patient Protection and Affordable Care Act unless the Secretary
has received confirmation from the Secretary of Health and Human
Services that the Commissioner of Social Security or the Secretary of
Homeland Security has verified under section 1411(c)(2) of such Act the
individual's status as a citizen or national of the United States or a
qualified alien (within the meaning of section 431 of the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996 (8
U.S.C. 1641)) using a process that includes the appropriate use of
information related to citizenship or immigration status, such as
social security account numbers (but not individual taxpayer
identification numbers).''.
(c) Conforming Amendment on Continuous Health Insurance Coverage
Provision.--Section 2710A(b)(1) of the Public Health Service Act, as
added by section 133 of the American Health Care Act of 2017, is
amended by adding after subparagraph (C) the following:
``In the case of an individual who applies for advance payment
of a credit under section 1412 of the Patient Protection and
Affordable Care Act and for whom a determination of eligibility
for such advance payment is delayed by reason of the
requirement for verification of the individual's status in the
United States under section 1411(c)(2) of such Act, the period
of days beginning with the date of application for advance
payment and ending with the date of such verification shall not
be taken into account in applying subparagraph (B). The
Secretary shall establish a procedure by which information
relating to this period is provided to the individual.''.
(d) Delay Permitted in Coverage Date in Case of Delay in Verification
of Status for Individuals Applying for Advance Payment of Credit.--
Section 1411(e) of the Patient Protection and Affordable Care Act (42
U.S.C. 18081(e)) is amended--
(1) in paragraph (3), by inserting after ``applicant's
eligibility'' the following: ``(other than eligibility for
advance payment of a credit under section 1412)''; and
(2) by adding at the end the following new paragraph:
``(5) Delay permitted in coverage date in case of delay in
verification of status for individuals applying for advance
payment of credit.--In the case of an individual whose
eligibility for advance payments is delayed by reason of the
requirement for verification under subsection (c)(2), if, for
coverage to be effective as of the date requested in the
individual's application for enrollment, the individual would
(but for this paragraph) be required to pay 2 or more months of
retroactive premiums, the individual shall be provided the
option to elect to postpone the effective date of coverage to
the date that is not more than 1 month later than the date
requested in the individual's application for enrollment.''.
(e) Effective Dates.--
(1) Application to current health insurance premium tax
credit.--The amendment made by subsection (a) is contingent
upon the enactment of the American Health Care Act of 2017 and
shall apply (if at all) to months beginning after December 31,
2017.
(2) Application to new health insurance premium tax credit.--
The amendment made by subsection (b) is contingent upon the
enactment of the American Health Care Act of 2017 and shall
apply (if at all) to months beginning after December 31, 2019,
in taxable years ending after such date.
(3) Conforming amendment on continuous health insurance
coverage provision.--The amendment made by subsection (c) is
contingent upon the enactment of the American Health Care Act
of 2017 and shall take effect (if at all) as if included in
such Act.
(4) Flexibility in coverage date in case of delay in
verification of status.--The amendment made by subsection (d)
is contingent upon the enactment of the American Health Care
Act of 2017 and shall apply (if at all) to applications for
advance payments for months beginning after December 31, 2017.

I. SUMMARY AND BACKGROUND

A. Purpose and Summary

The bill, H.R. 2581, as reported by the Committee on Ways
and Means, amends the premium tax credit under section 36B of
the Internal Revenue Code (``Code''),\1\ to specify that
advance payments of the credit are not to be made with respect
to an individual unless the Secretary of the Treasury has
confirmed with the Secretary of Health and Human Services that
the individual's status as a citizen or national of the United
States, or as lawfully present in the United States, has been
verified. In addition, H.R. 2581, as reported by the Committee
on Ways and Means, amends H.R. 1628, the American Health Care
Act of 2017, as passed by the House of Representatives on May
4, 2017, to provide a similar rule with respect to advance
payments of a new credit for the purchase of health insurance
(effective for months beginning after December 31, 2019, in
taxable years ending after that date).
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\1\All section references herein are to the Internal Revenue Code
of 1986, as amended, unless otherwise stated.
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B. Background and Need for Legislation

Under present law and the American Health Care Act of 2017,
an individual is not eligible for the premium assistance credit
unless the individual is a citizen or national of the United
States, or, in the case of the presentlaw credit,
lawfully present in the United States, or, in the case of the
new credit under the American Health Care Act of 2017, a
qualified alien. The procedures applicable with respect to
advance payment of either credit require verification of the
individual's status by the Secretary of Health and Human
Services before advance payments of the credit are made by the
Department of the Treasury. However, existing procedures may
not be sufficient to ensure that proper verification has
occurred. The bill therefore requires the Secretary of the
Treasury to confirm such verification before making an advanced
payment.
On March 8, 2017, in fulfillment of the reconciliation
instructions included in section 2002 of the Concurrent
Resolution on the Budget for Fiscal Year 2017 (S. Con. Res. 3),
the Committee marked up Budget Reconciliation Legislative
Recommendations Relating to Repeal and Replace of Health-
Related Tax Policy. This submission included provisions
modifying the determination and advanced payment of the
refundable tax credit. However, that language was later changed
at the Committee on Rules in order to comply with Senate
guidance regarding the Reconciliation process.

C. Legislative History

Background

H.R. 2581 was introduced on May 22, 2017, and was referred
to the Committee on Ways and Means and the Committee on Energy
and Commerce.

Committee action

The Committee on Ways and Means marked up H.R. 2581, the
Verify First Act, on May 24, 2017, and ordered the bill, as
amended, favorably reported (with a quorum being present).

Committee hearings

Since the 112th Congress, the Committee on Ways and Means
and its subcommittees have held a number of hearings on health
reform that explored various parts of the health system and
informed policy contained in the American Health Care Act.
These hearings include:
March 2, 2011--Hearing on Improving Efforts
to Combat Health Care Fraud
September 11, 2012--Hearing on Internal
Revenue Service's Implementation and Administration of
the Democrats' Health Care Law
September 12, 2012--Hearing on
Implementation of Health Insurance Exchanges and
Related Provisions
December 4, 2013--Hearing on the Challenges
of the Affordable Care Act
June 10, 2014--Verification of Income and
Insurance Information under the Affordable Care Act
March 14, 2016--Hearing on the Tax Treatment
of Health Care
May 17, 2016--Member Day Hearing on Tax-
Related Proposals to Improve Health Care

II. EXPLANATION OF THE BILL

A. Verification of Status in United States as Condition of Receiving
Advance Payment of Health Insurance Premium Tax Credit

PRESENT LAW

Premium assistance credit

In general
A refundable tax credit (``premium assistance credit'') is
provided for eligible individuals and families to subsidize the
purchase of health insurance plans through an American Health
Benefit Exchange (``Exchange''), referred to as ``qualified
health plans.''\2\ In general, as discussed below, advance
payments with respect to the premium assistance credit are made
during the year directly to the insurer. However, eligible
individuals may choose to pay their total health insurance
premiums without advance payments and claim the credit at the
end of the taxable year.
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\2\Sec. 36B, effective for taxable years ending after December 31,
2013. Under the Affordable Care Act, an American Health Benefit
Exchange is a source through which individuals can purchase health
insurance coverage. As used herein, the Affordable Care Act (or
``ACA'') refers to the combination of the Patient Protection and
Affordable Care Act (``PPACA''), Pub. L. No. 111-148, and the
Healthcare and Education Reconciliation Act of 2010 (``HCERA''), Pub.
L. No. 111-152. Qualified health plan is defined in PPACA section 1301.
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The premium assistance credit is generally available for
individuals (single or joint filers) with household incomes
between 100 and 400 percent of the Federal poverty level
(``FPL'') for the family size involved.\3\ Household income is
defined as the sum of: (1) the individual's modified adjusted
gross income, plus (2) the aggregate modified adjusted gross
incomes of all other individuals taken into account in
determining the individual's family size (but only if the other
individuals are required to file a tax return for the taxable
year). Modified adjusted gross income is defined as adjusted
gross income increased by: (1) any amount excluded from gross
income for citizens or residents living abroad,\4\ (2) any tax-
exempt interest received or accrued during the tax year, and
(3) the portion of the individual's social security benefits
not included in gross income.\5\ To be eligible for the premium
assistance credit, individuals who are married must file a
joint return. Individuals who are listed as dependents on a
return are not eligible for the premium assistance credit.
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\3\Federal poverty level refers to the most recently published
poverty guidelines determined by the Secretary of Health and Human
Services. Levels for 2017 and previous years are available at https://
aspe.hhs.gov/prior-hhs-poverty-guidelines-and-federal-register-
references.
\4\Sec. 911.
\5\Under section 86, only a portion of an individual's social
security benefits are included in gross income.
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In order to enroll in a qualified health plan through an
Exchange and receive the premium assistance credit, an
individual must be a citizen or national of the United States
or an alien lawfully present in the United States.\6\
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\6\PPACA sec. 1312(f)(3) and sec. 36B(e)(2).
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Advance payments and reconciliation on tax return
As part of the process of enrollment in a qualified health
plan through an Exchange, an individual may apply and be
approved for advance payments with respect to a premium
assistance credit (``advance payments'').\7\ The individual
must provide information on income, family size, changes in
marital or family status or income, and U.S. citizen, national
or lawfully present status. The Exchange process includes a
system through which the Secretary of Health and Human Services
(``HHS'') verifies information provided by the individual using
information from certain Federal agencies and other sources.
U.S. citizen, national or lawfully present status is verified
by obtaining information from the Commissioner of Social
Security and the Secretary of Homeland Security.\8\ If an
individual is approved for advance payments, the Department of
the Treasury pays the advance amount directly to the issuer of
the health plan in which the individual is enrolled. The
individual then pays to the issuer of the plan the difference,
if any, between the advance payment amount and the total
premium charged for the plan.
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\7\PPACA secs. 1411-1412. The Department of Health and Human
Services is responsible for rules relating to Exchanges and the
eligibility determination process.
\8\PPACA sec. 1411(c)(2).
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An individual on whose behalf advance payments of the
premium assistance credit for a taxable year are made is
required to file an income tax return to reconcile the advance
payments with the credit to which the individual is entitled
for the taxable year.
If the advance payments of the premium assistance credit
exceed the amount of credit to which the individual is
entitled, the excess (``excess advance payments'') is treated
as an additional tax liability on the individual's income tax
return for the taxable year (referred to as ``recapture''),
subject to a limit on the amount of additional liability in
some cases. For an individual with household income below 400
percent of FPL, liability for the excess advance payments for a
taxable year is limited to a specific dollar amount (the
``applicable dollar amount'') as shown in the table below. One-
half of the applicable dollar amount shown in the table below
applies to an unmarried individual who is not a surviving
spouse or filing as a head of household.

RECONCILIATION LIMIT ON ADDITIONAL TAX LIABILITY (FOR 2017)
------------------------------------------------------------------------
Applicable
Household income (expressed as a percent of FPL) dollar
amount
------------------------------------------------------------------------
Less than 200%............................................. $600
At least 200% but less than 300%........................... 1,500
At least 300% but less than 400%........................... 2,550
------------------------------------------------------------------------

\9\Rev. Proc. 2016-55, 2015-45 I.R.B. 707. The applicable dollar
amounts are indexed to reflect cost-of-living increases, with the
amount of any increase rounded down to the next lowest multiple of $50.
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If the advance payments of the premium assistance credit
for a taxable year are less than the amount of the credit to
which the individual is entitled, the additional credit amount
is also reflected on the individual's income tax return for the
year.

SSNs and ITINs

An individual filing a U.S. tax return is required to state
his or her taxpayer identification number on the return.
Generally, a taxpayer identification number is the individual's
Social Security number (``SSN'').\10\ However, in the case of
an individual who is not eligible to be issued an SSN, but who
has a tax filing obligation, the Internal Revenue Service
issues an individual taxpayer identification number (``ITIN'')
for use in connection with the individual's tax filing
requirements.\11\ An individual who is eligible to receive an
SSN may not obtain an ITIN for purposes of his or her tax
filing obligations.\12\ An ITIN does not provide eligibility to
work in the United States or to claim Social Security benefits.
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\10\Sec. 6109(a).
\11\Treas. Reg. Sec. 301.6109-1(d)(3)(i).
\12\Treas. Reg. Sec. 301.6109-1(d)(3)(ii).
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THE AMERICAN HEALTH CARE ACT OF 2017

The American Health Care Act of 2017, as passed by the
House of Representatives on May 4, 2017 (the ``AHCA''), amends
various health-related provisions of the Code.\13\ Effective
for months beginning after December 31, 2019, in taxable years
ending after that date, the AHCA replaces the present-law
premium assistance credit with a new credit.\14\ Under the
AHCA, an individual is eligible for the new premium assistance
credit only if the individual is a citizen or national of the
United States or a qualified alien.\15\ In connection with the
new premium assistance credit, the AHCA amends the provisions
relating to advance payment of the credit to direct the
Secretary of the Treasury and the Secretary of HHS to prescribe
such regulations as each Secretary may deem necessary to
establish and operate the advance payment program in a manner
that protects taxpayer information, provides robust
verification of all information necessary to establish
eligibility for advance payments, ensures proper and timely
payments to appropriate health providers, and protects program
integrity to the maximum extent feasible.\16\
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\13\H.R. 1628, as passed by the House of Representatives on May 4,
2017. The AHCA also amends certain provisions of the Public Health
Service Act (the ``PHSA''). Under present-law PHSA section 2701,
premiums charged for health insurance purchased in the individual
market are permitted to vary only by certain factors, such as the
number of individuals covered by the insurance and, within limits, the
age of the insured. This limit on premium variation is referred to as
community rating. AHCA section 133 amends the PHSA to require an
increase of 30 percent in the otherwise applicable premium in certain
cases where an individual enrolling in health insurance coverage did
not have health insurance for 63 or more consecutive days during the
preceding 12-month period (sometimes referred to as the ``continuous
coverage'' requirement). Under AHCA section 136, in certain cases where
the continuous coverage requirement is not met, premiums may be based
on the health status of the individual in lieu of the 30 percent
premium increase.
\14\AHCA section 214. AHCA section 201 amends the present-law
premium assistance credit to repeal the limits on recapture of excess
advance payments, effective for taxable years beginning after December
31, 2017. AHCA section 202 makes other changes to the present-law
premium assistance credit for periods before the new credit becomes
effective.
\15\Qualified alien is defined in section 431 of the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996 (8
U.S.C. sec. 1641).
\16\AHCA section 214(b), adding a new PPACA section 1412(f).
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REASONS FOR CHANGE

The Committee is concerned that the existing verification
procedures that apply with respect to citizen, national or
immigration status before advance payments may be made do not
adequately ensure that only eligible individuals are approved
for advance payments. Erroneous advance payments represent a
misuse of taxpayer funds and contribute to Federal deficits,
particularly when erroneous amounts cannot be fully recovered.
The Committee therefore wishes to strengthen the procedures
that must be followed before advance payments can be made.

EXPLANATION OF PROVISION

The provision amends the present-law premium assistance
credit to specify that no advance payments are to be made with
respect to an individual unless the Secretary of the Treasury
has received confirmation from the Secretary of HHS that the
Commissioner of Social Security or the Secretary of Homeland
Security has verified the individual's status as a citizen or
national of the United States or an alien lawfully present in
the United States using a process that includes the appropriate
use of information related to citizenship or immigration
status, such as SSNs.\17\ The provision also amends the
provision of the AHCA relating to the new premium assistance
credit to add a similar requirement of confirmation that an
individual's status as a citizen or national of the United
States or a qualified alien has been verified.\18\
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\17\An SSN is not the sole means by which citizenship or
immigration status can be verified. However, under the provision, an
ITIN cannot be used to verify citizenship or immigration status.
\18\The bill also contains a provision that amends the continuus
coverage requirement under AHCA section 133 so that, in the case of an
individual for whom a determination of eligibility for advance payments
is delayed by reason of the requirement to verify the individual's
status under PPACA section 1411(c)(2), the period from the date of
application for advance payments to the date of verification is
disregarded in determining whether the individual meets the continuous
coverage requirement (including for purposes of whether, under AHCA
section 136, premiums can be based on the individual's health status).
The bill further contains a provision that amends PPACA section 1411 to
require with respect to such an individual that, if, in order for the
individual's health coverage to be effective as of the date requested
in the individual's application for enrollment, the individual would be
required to pay retroactive premiums for two or more months, the
individual must be provided the option of postponing the effective date
of coverage for up to one month.
---------------------------------------------------------------------------

EFFECTIVE DATE

The provision relating to the present-law premium
assistance credit is contingent on the enactment of the AHCA
and will apply (if at all) to months beginning after December
31, 2017. The provision relating to the new premium assistance
credit under the AHCA is contingent on the enactment of the
AHCA and will apply (if at all) to months beginning after
December 31, 2019, in taxable years ending after that date.\19\
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\19\The provision amending the continuous coverage requirement
under AHCA section 133 is contingent on enactment of the AHCA and will
take effect (if at all) as if included in the AHCA. The provision
relating to the postponement of health coverage by an individual, for
whom a determination of eligibility for advance payments is delayed by
reason of the requirement to verify the individual's status under PPACA
section 1411(c)(2), is contingent on enactment of the AHCA and will
apply (if at all) to applications for advance payments for months
beginning after December 31, 2017.
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III. VOTES OF THE COMMITTEE

In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the vote of the Committee on Ways and Means in its
consideration of H.R. 2581, the ``Verify First Act,'' on May
24, 2017.
The vote on the amendment by Ms. Sanchez to the amendment
in the nature of a substitute to H.R. 2581, which would limit
the applicability of the underlying provision, was not agreed
to by a roll call vote of 21 nays to 16 yeas (with a quorum
being present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Brady....................... ........ X ........ Mr. Neal.......... X ........ ........
Mr. Johnson..................... ........ ........ ........ Mr. Levin......... X ........ ........
Mr. Nunes....................... ........ X ........ Mr. Lewis......... X ........ ........
Mr. Tiberi...................... ........ X ........ Mr. Doggett....... X ........ ........
Mr. Reichert.................... ........ X ........ Mr. Thompson...... X ........ ........
Mr. Roskam...................... ........ ........ ........ Mr. Larson........ X ........ ........
Mr. Buchanan.................... ........ X ........ Mr. Blumenauer.... X ........ ........
Mr. Smith (NE).................. ........ X ........ Mr. Kind.......... X ........ ........
Ms. Jenkins..................... ........ X ........ Mr. Pascrell...... X ........ ........
Mr. Paulsen..................... ........ X ........ Mr. Crowley....... X ........ ........
Mr. Marchant.................... ........ X ........ Mr. Davis......... X ........ ........
Ms. Black....................... ........ ........ ........ Ms. Sanchez....... X ........ ........
Mr. Reed........................ ........ X ........ Mr. Higgins....... X ........ ........
Mr. Kelly....................... ........ X ........ Ms. Sewell........ X ........ ........
Mr. Renacci..................... ........ X ........ Ms. DelBene....... X ........ ........
Mr. Meehan...................... ........ X ........ Ms. Chu........... X ........ ........
Ms. Noem........................ ........ X ........
Mr. Holding..................... ........ X ........
Mr. Smith (MO).................. ........ X ........
Mr. Rice........................ ........ X ........
Mr. Schweikert.................. ........ X ........
Ms. Walorski.................... ........ X ........
Mr. Curbelo..................... ........ X ........
Mr. Bishop...................... ........ X ........
----------------------------------------------------------------------------------------------------------------

Mr. Nunes's motion to table Mr. Doggett's appeal of the
ruling of the Chair was agreed to by a roll call vote of 22
yeas and 16 nays (with a quorum being present). The vote was as
follows:

----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Brady....................... X ........ ........ Mr. Neal.......... ........ X ........
Mr. Johnson..................... ........ ........ ........ Mr. Levin......... ........ X ........
Mr. Nunes....................... X ........ ........ Mr. Lewis......... ........ X ........
Mr. Tiberi...................... X ........ ........ Mr. Doggett....... ........ X ........
Mr. Reichert.................... X ........ ........ Mr. Thompson...... ........ X ........
Mr. Roskam...................... X ........ ........ Mr. Larson........ ........ X ........
Mr. Buchanan.................... X ........ ........ Mr. Blumenauer.... ........ X ........
Mr. Smith (NE).................. X ........ ........ Mr. Kind.......... ........ X ........
Ms. Jenkins..................... X ........ ........ Mr. Pascrell...... ........ X ........
Mr. Paulsen..................... X ........ ........ Mr. Crowley....... ........ X ........
Mr. Marchant.................... X ........ ........ Mr. Davis......... ........ X ........
Ms. Black....................... ........ ........ ........ Ms. Sanchez....... ........ X ........
Mr. Reed........................ X ........ ........ Mr. Higgins....... ........ X ........
Mr. Kelly....................... X ........ ........ Ms. Sewell........ ........ X ........
Mr. Renacci..................... X ........ ........ Ms. DelBene....... ........ X ........
Mr. Meehan...................... X ........ ........ Ms. Chu........... ........ X ........
Ms. Noem........................ X ........ ........
Mr. Holding..................... X ........ ........
Mr. Smith (MO).................. X ........ ........
Mr. Rice........................ X ........ ........
Mr. Schweikert.................. X ........ ........
Ms. Walorski.................... X ........ ........
Mr. Curbelo..................... X ........ ........
Mr. Bishop...................... X ........ ........
----------------------------------------------------------------------------------------------------------------

The legislation was ordered favorably transmitted to the
House of Representatives as amended by a roll call vote of 22
yeas and 16 nays (with a quorum being present). The vote was as
follows:

----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Brady....................... X ........ ........ Mr. Neal.......... ........ X ........
Mr. Johnson..................... ........ ........ ........ Mr. Levin......... ........ X ........
Mr. Nunes....................... X ........ ........ Mr. Lewis......... ........ X ........
Mr. Tiberi...................... X ........ ........ Mr. Doggett....... ........ X ........
Mr. Reichert.................... X ........ ........ Mr. Thompson...... ........ X ........
Mr. Roskam...................... X ........ ........ Mr. Larson........ ........ X ........
Mr. Buchanan.................... X ........ ........ Mr. Blumenauer.... ........ X ........
Mr. Smith (NE).................. X ........ ........ Mr. Kind.......... ........ X ........
Ms. Jenkins..................... X ........ ........ Mr. Pascrell...... ........ X ........
Mr. Paulsen..................... X ........ ........ Mr. Crowley....... ........ X ........
Mr. Marchant.................... X ........ ........ Mr. Davis......... ........ X ........
Ms. Black....................... ........ ........ ........ Ms. Sanchez....... ........ X ........
Mr. Reed........................ X ........ ........ Mr. Higgins....... ........ X ........
Mr. Kelly....................... X ........ ........ Ms. Sewell........ ........ X ........
Mr. Renacci..................... X ........ ........ Ms. DelBene....... ........ X ........
Mr. Meehan...................... X ........ ........ Ms. Chu........... ........ X ........
Ms. Noem........................ X ........ ........
Mr. Holding..................... X ........ ........
Mr. Smith (MO).................. X ........ ........
Mr. Rice........................ X ........ ........
Mr. Schweikert.................. X ........ ........
Ms. Walorski.................... X ........ ........
Mr. Curbelo..................... X ........ ........
Mr. Bishop...................... X ........ ........
----------------------------------------------------------------------------------------------------------------

IV. BUDGET EFFECTS OF THE BILL

A. Committee Estimate of Budgetary Effects

In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 2581, as
reported.
The bill, as reported, is estimated to have no effect on
Federal fiscal year budget receipts for fiscal years 2017-2027.
Pursuant to clause 8 of rule XIII of the Rules of the House
of Representatives, the following statement is made by the
Joint Committee on Taxation with respect to the provisions of
the bill amending the Internal Revenue Code of 1986: The gross
budgetary effect (before incorporating macroeconomic effects)
in any fiscal year is less than 0.25 percent of the current
projected gross domestic product of the United States for that
fiscal year; therefore, the bill is not ``major legislation''
for purposes of requiring that the estimate include the
budgetary effects of changes in economic output, employment,
capital stock and other macroeconomic variables.

B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority

In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority. The
Committee further states that the revenue provisions of the
bill do not increase or decrease tax expenditures.

C. Cost Estimate Prepared by the Congressional Budget Office

In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following statement by CBO is
provided.

U.S. Congress,
Congressional Budget Office,
Washington, DC, June 1, 2017.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2581, the Verify
First Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Mark Booth.
Sincerely,
Keith Hall, Director.
Enclosure.

H.R. 2581--Verify First Act

H.R. 2581 would amend the Internal Revenue Code related to
advance payments of health-related tax credits, contingent upon
enactment of the American Health Care Act of 2017. Under that
contingency, H.R. 2581 would add additional verification
procedures before the Department of Treasury could make
payments of certain tax credits in advance to health insurers
on behalf of enrollees. Specifically, the bill would require
that no advance payments could be made unless the Secretary of
the Treasury has received confirmation from the Secretary of
Health and Human Services that either the Commissioner of
Social Security or the Secretary of Homeland Security has
verified the individual's status either as a U.S. citizen or
national or as an alien lawfully present in the country. The
verification process would need to include information related
to citizenship or immigration status, such as Social Security
numbers. The requirements would apply through 2017 to the
premium assistance credits that exist under current law and
after 2017 to the new credits that would be established by
enactment of the American Health Care Act of 2017.
Because the effects of the bill would be contingent upon
enactment of subsequent legislation, the staff of the Joint
Committee on Taxation estimates that the bill would in
isolation have no effect on revenues or direct spending
relative to current law. As a result, pay-as-you-go procedures
do not apply. However, if the American Health Care Act of 2017
was enacted prior to this legislation, then relative to the new
law the enactment of this bill could affect revenues or direct
spending and, as a result, subsequent estimates of the effects
of this legislation could change.
CBO and JCT estimate that enacting the bill would not
increase on-budget deficits or net direct spending by more than
$5 billion in any of the four 10-year periods beginning in
2028.
JCT has determined that the bill contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Mark Booth. The
estimate was approved by John McClelland, Assistant Director
for Tax Analysis.

V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE

A. Committee Oversight Findings and Recommendations

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee advises that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated into
the description portions of this report.

B. Statement of General Performance Goals and Objectives

With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizes funding is required.

C. Information Relating to Unfunded Mandates

This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.

D. Applicability of House Rule XXI 5(b)

Rule XXI 5(b) of the Rules of the House of Representatives
provides, in part, that ``A bill or joint resolution,
amendment, or conference report carrying a Federal income tax
rate increase may not be considered as passed or agreed to
unless so determined by a vote of not less than three-fifths of
the Members voting, a quorum being present.'' The Committee has
carefully reviewed the bill and states that the bill does not
involve any Federal income tax rate increases within the
meaning of the rule.

E. Tax Complexity Analysis

Section 4022(b) of the Internal Revenue Service
Restructuring and Reform Act of 1998 (``IRS Reform Act'')
requires the staff of the Joint Committee on Taxation (in
consultation with the Internal Revenue Service and the Treasury
Department) to provide a tax complexity analysis. The
complexity analysis is required for all legislation reported by
the Senate Committee on Finance, the House Committee on Ways
and Means, or any committee of conference if the legislation
includes a provision that directly or indirectly amends the
Internal Revenue Code of 1986 and has widespread applicability
to individuals or small businesses.
Pursuant to clause 3(h)(1) of rule XIII of the Rules of the
House of Representatives, the staff of the Joint Committee on
Taxation has determined that a complexity analysis is not
required under section 4022(b) of the IRS Reform Act because
the bill contains no provisions that amend the Internal Revenue
Code of 1986 and that have ``widespread applicability'' to
individuals or small businesses, within the meaning of the
rule.

F. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits

With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.

G. Duplication of Federal Programs

In compliance with Sec. 3(c)(5) of rule XIII of the Rules
of the House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes: (1) a
program of the Federal Government known to be duplicative of
another Federal program, (2) a program included in any report
from the Government Accountability Office to Congress pursuant
to section 21 of Public Law 111-139, or (3) a program related
to a program identified in the most recent Catalog of Federal
Domestic Assistance, published pursuant to section 6104 of
title 31, United States Code.

H. Disclosure of Directed Rule Makings

In compliance with Sec. 3(i) of H. Res. 5 (115th Congress),
the following statement is made concerning directed rule
makings: The Committee advises that the bill requires no
directed rule makings within the meaning of such section.

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):

Changes in Existing Law Made by the Bill, as Reported

INTERNAL REVENUE CODE OF 1986

* * * * * * *

Subtitle A--Income Taxes

* * * * * * *

CHAPTER 1--NORMAL TAXES AND SURTAXES

* * * * * * *

Subchapter A--Determination of Tax Liability

* * * * * * *

PART IV--CREDITS AGAINST TAX

* * * * * * *

Subpart C--Refundable Credits

* * * * * * *

[The following shows proposed changes to current law section
36B of the Internal Revenue Code of 1986:]

SEC. 36B. REFUNDABLE CREDIT FOR COVERAGE UNDER A QUALIFIED HEALTH PLAN.

(a) In General.--In the case of an applicable taxpayer, there
shall be allowed as a credit against the tax imposed by this
subtitle for any taxable year an amount equal to the premium
assistance credit amount of the taxpayer for the taxable year.
(b) Premium Assistance Credit Amount.--For purposes of this
section--
(1) In general.--The term ``premium assistance credit
amount'' means, with respect to any taxable year, the
sum of the premium assistance amounts determined under
paragraph (2) with respect to all coverage months of
the taxpayer occurring during the taxable year.
(2) Premium assistance amount.--The premium
assistance amount determined under this subsection with
respect to any coverage month is the amount equal to
the lesser of--
(A) the monthly premiums for such month for 1
or more qualified health plans offered in the
individual market within a State which cover
the taxpayer, the taxpayer's spouse, or any
dependent (as defined in section 152) of the
taxpayer and which were enrolled in through an
Exchange established by the State under 1311 of
the Patient Protection and Affordable Care Act,
or
(B) the excess (if any) of--
(i) the adjusted monthly premium for
such month for the applicable second
lowest cost silver plan with respect to
the taxpayer, over
(ii) an amount equal to 1/12 of the
product of the applicable percentage
and the taxpayer's household income for
the taxable year.
(3) Other terms and rules relating to premium
assistance amounts.--For purposes of paragraph (2)--
(A) Applicable percentage.--
(i) In general.--Except as provided
in clause (ii), the applicable
percentage for any taxable year shall
be the percentage such that the
applicable percentage for any taxpayer
whose household income is within an
income tier specified in the following
table shall increase, on a sliding
scale in a linear manner, from the
initial premium percentage to the final
premium percentage specified in such
table for such income tier:

------------------------------------------------------------------------
In the case of
household income
(expressed as a percent The initial premium The final premium
of poverty line) within percentage is-- percentage is--
the following income
tier:
------------------------------------------------------------------------
Up to 133% 2.0% 2.0%
133% up to 150% 3.0% 4.0%
150% up to 200% 4.0% 6.3%
200% up to 250% 6.3% 8.05%
250% up to 300% 8.05% 9.5%
300% up to 400% 9.5% 9.5%
------------------------------------------------------------------------

(ii) Indexing.--
(I) In general.--Subject to
subclause (II), in the case of
taxable years beginning in any
calendar year after 2014, the
initial and final applicable
percentages under clause (i)
(as in effect for the preceding
calendar year after application
of this clause) shall be
adjusted to reflect the excess
of the rate of premium growth
for the preceding calendar year
over the rate of income growth
for the preceding calendar
year.
(II) Additional adjustment.--
Except as provided in subclause
(III), in the case of any
calendar year after 2018, the
percentages described in
subclause (I) shall, in
addition to the adjustment
under subclause (I), be
adjusted to reflect the excess
(if any) of the rate of premium
growth estimated under
subclause (I) for the preceding
calendar year over the rate of
growth in the consumer price
index for the preceding
calendar year.
(III) Failsafe.--Subclause
(II) shall apply for any
calendar year only if the
aggregate amount of premium tax
credits under this section and
cost-sharing reductions under
section 1402 of the Patient
Protection and Affordable Care
Act for the preceding calendar
year exceeds an amount equal to
0.504 percent of the gross
domestic product for the
preceding calendar year.
(B) Applicable second lowest cost silver
plan.--The applicable second lowest cost silver
plan with respect to any applicable taxpayer is
the second lowest cost silver plan of the
individual market in the rating area in which
the taxpayer resides which--
(i) is offered through the same
Exchange through which the qualified
health plans taken into account under
paragraph (2)(A) were offered, and
(ii) provides--
(I) self-only coverage in the
case of an applicable
taxpayer--
(aa) whose tax for
the taxable year is
determined under
section 1(c) (relating
to unmarried
individuals other than
surviving spouses and
heads of households)
and who is not allowed
a deduction under
section 151 for the
taxable year with
respect to a dependent,
or
(bb) who is not
described in item (aa)
but who purchases only
self-only coverage, and
(II) family coverage in the
case of any other applicable
taxpayer.
If a taxpayer files a joint return and no
credit is allowed under this section with
respect to 1 of the spouses by reason of
subsection (e), the taxpayer shall be treated
as described in clause (ii)(I) unless a
deduction is allowed under section 151 for the
taxable year with respect to a dependent other
than either spouse and subsection (e) does not
apply to the dependent.
(C) Adjusted monthly premium.--The adjusted
monthly premium for an applicable second lowest
cost silver plan is the monthly premium which
would have been charged (for the rating area
with respect to which the premiums under
paragraph (2)(A) were determined) for the plan
if each individual covered under a qualified
health plan taken into account under paragraph
(2)(A) were covered by such silver plan and the
premium was adjusted only for the age of each
such individual in the manner allowed under
section 2701 of the Public Health Service Act.
In the case of a State participating in the
wellness discount demonstration project under
section 2705(d) of the Public Health Service
Act, the adjusted monthly premium shall be
determined without regard to any premium
discount or rebate under such project.
(D) Additional benefits.--If--
(i) a qualified health plan under
section 1302(b)(5) of the Patient
Protection and Affordable Care Act
offers benefits in addition to the
essential health benefits required to
be provided by the plan, or
(ii) a State requires a qualified
health plan under section 1311(d)(3)(B)
of such Act to cover benefits in
addition to the essential health
benefits required to be provided by the
plan,
the portion of the premium for the plan
properly allocable (under rules prescribed by
the Secretary of Health and Human Services) to
such additional benefits shall not be taken
into account in determining either the monthly
premium or the adjusted monthly premium under
paragraph (2).
(E) Special rule for pediatric dental
coverage.--For purposes of determining the
amount of any monthly premium, if an individual
enrolls in both a qualified health plan and a
plan described in section 1311(d)(2)(B)(ii) (I)
of the Patient Protection and Affordable Care
Act for any plan year, the portion of the
premium for the plan described in such section
that (under regulations prescribed by the
Secretary) is properly allocable to pediatric
dental benefits which are included in the
essential health benefits required to be
provided by a qualified health plan under
section 1302(b)(1)(J) of such Act shall be
treated as a premium payable for a qualified
health plan.
(c) Definition and Rules Relating to Applicable Taxpayers,
Coverage Months, and Qualified Health Plan.--For purposes of
this section--
(1) Applicable taxpayer.--
(A) In general.--The term ``applicable
taxpayer'' means, with respect to any taxable
year, a taxpayer whose household income for the
taxable year equals or exceeds 100 percent but
does not exceed 400 percent of an amount equal
to the poverty line for a family of the size
involved.
(B) Special rule for certain individuals
lawfully present in the United States.--If--
(i) a taxpayer has a household income
which is not greater than 100 percent
of an amount equal to the poverty line
for a family of the size involved, and
(ii) the taxpayer is an alien
lawfully present in the United States,
but is not eligible for the medicaid
program under title XIX of the Social
Security Act by reason of such alien
status,
the taxpayer shall, for purposes of the credit
under this section, be treated as an applicable
taxpayer with a household income which is equal
to 100 percent of the poverty line for a family
of the size involved.
(C) Married couples must file joint return.--
If the taxpayer is married (within the meaning
of section 7703) at the close of the taxable
year, the taxpayer shall be treated as an
applicable taxpayer only if the taxpayer and
the taxpayer's spouse file a joint return for
the taxable year.
(D) Denial of credit to dependents.--No
credit shall be allowed under this section to
any individual with respect to whom a deduction
under section 151 is allowable to another
taxpayer for a taxable year beginning in the
calendar year in which such individual's
taxable year begins.
(2) Coverage month.--For purposes of this
subsection--
(A) In general.--The term ``coverage month''
means, with respect to an applicable taxpayer,
any month if--
(i) as of the first day of such month
the taxpayer, the taxpayer's spouse, or
any dependent of the taxpayer is
covered by a qualified health plan
described in subsection (b)(2)(A) that
was enrolled in through an Exchange
established by the State under section
1311 of the Patient Protection and
Affordable Care Act, and
(ii) the premium for coverage under
such plan for such month is paid by the
taxpayer (or through advance payment of
the credit under subsection (a) under
section 1412 of the Patient Protection
and Affordable Care Act).
(B) Exception for minimum essential
coverage.--
(i) In general.--The term ``coverage
month'' shall not include any month
with respect to an individual if for
such month the individual is eligible
for minimum essential coverage other
than eligibility for coverage described
in section 5000A(f)(1)(C) (relating to
coverage in the individual market).
(ii) Minimum essential coverage.--The
term ``minimum essential coverage'' has
the meaning given such term by section
5000A(f).
(C) Special rule for employer-sponsored
minimum essential coverage.--For purposes of
subparagraph (B)--
(i) Coverage must be affordable.--
Except as provided in clause (iii), an
employee shall not be treated as
eligible for minimum essential coverage
if such coverage--
(I) consists of an eligible
employer-sponsored plan (as
defined in section
5000A(f)(2)), and
(II) the employee's required
contribution (within the
meaning of section
5000A(e)(1)(B)) with respect to
the plan exceeds 9.5 percent of
the applicable taxpayer's
household income.
This clause shall also apply to an
individual who is eligible to enroll in
the plan by reason of a relationship
the individual bears to the employee.
(ii) Coverage must provide minimum
value.--Except as provided in clause
(iii), an employee shall not be treated
as eligible for minimum essential
coverage if such coverage consists of
an eligible employer-sponsored plan (as
defined in section 5000A(f)(2)) and the
plan's share of the total allowed costs
of benefits provided under the plan is
less than 60 percent of such costs.
(iii) Employee or family must not be
covered under employer plan.--Clauses
(i) and (ii) shall not apply if the
employee (or any individual described
in the last sentence of clause (i)) is
covered under the eligible employer-
sponsored plan or the grandfathered
health plan.
(iv) Indexing.--In the case of plan
years beginning in any calendar year
after 2014, the Secretary shall adjust
the 9.5 percent under clause (i)(II) in
the same manner as the percentages are
adjusted under subsection
(b)(3)(A)(ii).
(3) Definitions and other rules.--
(A) Qualified health plan.--The term
``qualified health plan'' has the meaning given
such term by section 1301(a) of the Patient
Protection and Affordable Care Act, except that
such term shall not include a qualified health
plan which is a catastrophic plan described in
section 1302(e) of such Act.
(B) Grandfathered health plan.--The term
``grandfathered health plan'' has the meaning
given such term by section 1251 of the Patient
Protection and Affordable Care Act.
(4) Special rules for qualified small employer health
reimbursement arrangements.--
(A) In general.--The term ``coverage month''
shall not include any month with respect to an
employee (or any spouse or dependent of such
employee) if for such month the employee is
provided a qualified small employer health
reimbursement arrangement which constitutes
affordable coverage.
(B) Denial of double benefit.--In the case of
any employee who is provided a qualified small
employer health reimbursement arrangement for
any coverage month (determined without regard
to subparagraph (A)), the credit otherwise
allowable under subsection (a) to the taxpayer
for such month shall be reduced (but not below
zero) by the amount described in subparagraph
(C)(i)(II) for such month.
(C) Affordable coverage.--For purposes of
subparagraph (A), a qualified small employer
health reimbursement arrangement shall be
treated as constituting affordable coverage for
a month if--
(i) the excess of--
(I) the amount that would be
paid by the employee as the
premium for such month for
self-only coverage under the
second lowest cost silver plan
offered in the relevant
individual health insurance
market, over
(II) \1/12\ of the employee's
permitted benefit (as defined
in section 9831(d)(3)(C)) under
such arrangement, does not
exceed--
(ii) \1/12\ of 9.5 percent of the
employee's household income.
(D) Qualified small employer health
reimbursement arrangement.--For purposes of
this paragraph, the term ``qualified small
employer health reimbursement arrangement'' has
the meaning given such term by section
9831(d)(2).
(E) Coverage for less than entire year.--In
the case of an employee who is provided a
qualified small employer health reimbursement
arrangement for less than an entire year,
subparagraph (C)(i)(II) shall be applied by
substituting "the number of months during the
year for which such arrangement was provided"
for "12'.
(F) Indexing.--In the case of plan years
beginning in any calendar year after 2014, the
Secretary shall adjust the 9.5 percent amount
under subparagraph (C)(ii) in the same manner
as the percentages are adjusted under
subsection (b)(3)(A)(ii).
(d) Terms Relating to Income and Families.--For purposes of
this section--
(1) 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.
(2) Household income.--
(A) Household income.--The term ``household
income'' means, with respect to any taxpayer,
an amount equal to the sum of--
(i) the modified adjusted gross
income of the taxpayer, plus
(ii) the aggregate modified adjusted
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.
(B) Modified adjusted gross income.--The term
``modified adjusted gross income'' means
adjusted gross income increased by--
(i) any amount excluded from gross
income under section 911,
(ii) any amount of interest received
or accrued by the taxpayer during the
taxable year which is exempt from tax,
and
(iii) an amount equal to the portion
of the taxpayer's social security
benefits (as defined in section 86(d))
which is not included in gross income
under section 86 for the taxable year.
(3) Poverty line.--
(A) 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)).
(B) Poverty line used.--In the case of any
qualified health plan offered through an
Exchange for coverage during a taxable year
beginning in a calendar year, the poverty line
used shall be the most recently published
poverty line as of the 1st day of the regular
enrollment period for coverage during such
calendar year.
(e) Rules for Individuals Not Lawfully Present.--
(1) In general.--If 1 or more individuals for whom a
taxpayer is allowed a deduction under section 151
(relating to allowance of deduction for personal
exemptions) for the taxable year (including the
taxpayer or his spouse) are individuals who are not
lawfully present--
(A) the aggregate amount of premiums
otherwise taken into account under clauses (i)
and (ii) of subsection (b)(2)(A) shall be
reduced by the portion (if any) of such
premiums which is attributable to such
individuals, and
(B) for purposes of applying this section,
the determination as to what percentage a
taxpayer's household income bears to the
poverty level for a family of the size involved
shall be made under one of the following
methods:
(i) A method under which--
(I) the taxpayer's family
size is determined by not
taking such individuals into
account, and
(II) the taxpayer's household
income is equal to the product
of the taxpayer's household
income (determined without
regard to this subsection) and
a fraction--
(aa) the numerator of
which is the poverty
line for the taxpayer's
family size determined
after application of
subclause (I), and
(bb) the denominator
of which is the poverty
line for the taxpayer's
family size determined
without regard to
subclause (I).
(ii) A comparable method reaching the
same result as the method under clause
(i).
(2) Lawfully present.--For purposes of this section,
an individual shall be treated as lawfully present only
if the individual is, and is reasonably expected to be
for the entire period of enrollment for which the
credit under this section is being claimed, a citizen
or national of the United States or an alien lawfully
present in the United States.
(3) Secretarial authority.--The Secretary of Health
and Human Services, in consultation with the Secretary,
shall prescribe rules setting forth the methods by
which calculations of family size and household income
are made for purposes of this subsection. Such rules
shall be designed to ensure that the least burden is
placed on individuals enrolling in qualified health
plans through an Exchange and taxpayers eligible for
the credit allowable under this section.
(f) Reconciliation of Credit and Advance Credit.--
(1) In general.--The amount of the credit allowed
under this section for any taxable year shall be
reduced (but not below zero) by the amount of any
advance payment of such credit under section 1412 of
the Patient Protection and Affordable Care Act.
(2) Excess advance payments.--
(A) In general.--If the advance payments to a
taxpayer under section 1412 of the Patient
Protection and Affordable Care Act for a
taxable year exceed the credit allowed by this
section (determined without regard to paragraph
(1)), the tax imposed by this chapter for the
taxable year shall be increased by the amount
of such excess.
(B) Limitation on increase.--
(i) In general.--In the case of a
taxpayer whose household income is less
than 400 percent of the poverty line
for the size of the family involved for
the taxable year, the amount of the
increase under subparagraph (A) shall
in no event exceed the applicable
dollar amount determined in accordance
with the following table (one-half of
such amount in the case of a taxpayer
whose tax is determined under section
1(c) for the taxable year):

------------------------------------------------------------------------
If the household income (expressed
as a percent of poverty line) is: The applicable dollar amount is:
------------------------------------------------------------------------
Less than 200% $600
At least 200% but less than 300% $1,500
At least 300% but less than 400% $2,500
------------------------------------------------------------------------

(ii) Indexing of amount.--In the case
of any calendar year beginning after
2014, each of the dollar amounts in the
table contained under clause (i) shall
be increased by an amount equal to--
(I) such dollar amount,
multiplied by
(II) the cost-of-living
adjustment determined under
section 1(f)(3) for the
calendar year, determined by
substituting ``calendar year
2013'' 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.
(3) Information requirement.--Each Exchange (or any
person carrying out 1 or more responsibilities of an
Exchange under section 1311(f)(3) or 1321(c) of the
Patient Protection and Affordable Care Act) shall
provide the following information to the Secretary and
to the taxpayer with respect to any health plan
provided through the Exchange:
(A) The level of coverage described in
section 1302(d) of the Patient Protection and
Affordable Care Act and the period such
coverage was in effect.
(B) The total premium for the coverage
without regard to the credit under this section
or cost-sharing reductions under section 1402
of such Act.
(C) The aggregate amount of any advance
payment of such credit or reductions under
section 1412 of such Act.
(D) The name, address, and TIN of the primary
insured and the name and TIN of each other
individual obtaining coverage under the policy.
(E) Any information provided to the Exchange,
including any change of circumstances,
necessary to determine eligibility for, and the
amount of, such credit.
(F) Information necessary to determine
whether a taxpayer has received excess advance
payments.
(g) Verification of Status in United States for Advance
Payment.--No advance payment of the credit allowed under this
section with respect to any premium under subsection (b)(2)(A)
with respect to any individual shall be made under section 1412
of the Patient Protection and Affordable Care Act unless the
Secretary has received confirmation from the Secretary of
Health and Human Services that the Commissioner of Social
Security or the Secretary of Homeland Security has verified
under section 1411(c)(2) of such Act the individual's status as
a citizen or national of the United States or an alien lawfully
present in the United States using a process that includes the
appropriate use of information related to citizenship or
immigration status, such as social security account numbers
(but not individual taxpayer identification numbers).
[(g)] (h) Regulations.--The Secretary shall prescribe such
regulations as may be necessary to carry out the provisions of
this section, including regulations which provide for--
(1) the coordination of the credit allowed under this
section with the program for advance payment of the
credit under section 1412 of the Patient Protection and
Affordable Care Act, and
(2) the application of subsection (f) where the
filing status of the taxpayer for a taxable year is
different from such status used for determining the
advance payment of the credit.
[The following shows proposed changes to section 36B of the
Internal Revenue Code of 1986 as such section is proposed to
read after amendment by section 214 of the American Health Care
Act of 2017 (H.R. 1628, as engrossed in the House):]

SEC. 36B. REFUNDABLE CREDIT FOR COVERAGE UNDER A QUALIFIED HEALTH PLAN.

(a) Allowance of Premium Tax Credit.--In the case of an
individual, there shall be allowed as a credit against the tax
imposed by this subtitle for the taxable year the sum of the
monthly credit amounts with respect to such taxpayer for
calendar months during such taxable year which are eligible
coverage months appropriately taken into account under
subsection (b)(2) with respect to the taxpayer or any
qualifying family member of the taxpayer.
(b) Monthly Credit Amounts.--
(1) In general.--The monthly credit amount with
respect to any taxpayer for any calendar month is the
lesser of--
(A) the sum of the monthly limitation amounts
determined under subsection (c) with respect to
the taxpayer and the taxpayer's qualifying
family members for such month, or
(B) the amount paid for a qualified health
plan for the taxpayer and the taxpayer's
qualifying family members for such month.
(2) Eligible coverage month requirement.--No amount
shall be taken into account under subparagraph (A) or
(B) of paragraph (1) with respect to any individual for
any month unless such month is an eligible coverage
month with respect to such individual.
(c) Monthly Limitation Amounts.--
(1) In general.--The monthly limitation amount with
respect to any individual for any eligible coverage
month during any taxable year is \1/12\ of--
(A) $2,000 in the case of an individual who
has not attained age 30 as of the beginning of
such taxable year,
(B) $2,500 in the case of an individual who
has attained age 30 but who has not attained
age 40 as of such time,
(C) $3,000 in the case of an individual who
has attained age 40 but who has not attained
age 50 as of such time,
(D) $3,500 in the case of an individual who
has attained age 50 but who has not attained
age 60 as of such time, and
(E) $4,000 in the case of an individual who
has attained age 60 as of such time.
(2) Limitation based on modified adjusted gross
income.--The credit allowed under subsection (a) with
respect to any taxpayer for any taxable year shall be
reduced (but not below zero) by 10 percent of the
excess (if any) of--
(A) the taxpayer's modified adjusted gross
income (as defined in section 36B(d)(2)(B), as
in effect for taxable years beginning before
January 1, 2020) for such taxable year, over
(B) $75,000 (twice such amount in the case of
a joint return).
(3) Other limitations.--
(A) Aggregate dollar limitation.--The sum of
the monthly limitation amounts taken into
account under this section with respect to any
taxpayer for any taxable year shall not exceed
$14,000.
(B) Maximum number of individuals taken into
account.--With respect to any taxpayer for any
month, monthly limitation amounts shall be
taken into account under this section only with
respect to the 5 oldest individuals with
respect to whom monthly limitation amounts
could (without regard to this subparagraph)
otherwise be so taken into account.
(d) Eligible Coverage Month.--For purposes of this section,
the term ``eligible coverage month'' means, with respect to any
individual, any month if, as of the first day of such month,
the individual meets the following requirements:
(1) The individual is covered by a health insurance
coverage which is certified by the State in which such
insurance is offered as coverage that meets the
requirements for qualified health plans under
subsection (f).
(2) The individual is not eligible for--
(A) coverage under a group health plan
(within the meaning of section 5000(b)(1))
other than coverage under a plan substantially
all of the coverage of which is of excepted
benefits described in section 9832(c), or
(B) coverage described in section
5000A(f)(1)(A).
(3) The individual is either--
(A) a citizen or national of the United
States, or
(B) a qualified alien (within the meaning of
section 431 of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (8
U.S.C. 1641)).
(4) The individual is not incarcerated, other than
incarceration pending the disposition of charges.
(e) 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,
(2) any dependent of the taxpayer, and
(3) with respect to any eligible coverage month, any
child (as defined in section 152(f)(1)) of the taxpayer
who as of the end of the taxable year has not attained
age 27 if such child is covered for such month under a
qualified health plan which also covers the taxpayer
(in the case of a joint return, either spouse).
(f) Qualified Health Plan.--For purposes of this section, the
term ``qualified health plan'' means any health insurance
coverage (as defined in section 9832(b)) if--
(1) such coverage is offered in the individual health
insurance market within a State (within the meaning of
section 5000A(f)(1)(C)),
(2) substantially all of such coverage is not of
excepted benefits described in section 9832(c),
(3) such coverage does not consist of short-term
limited duration insurance (within the meaning of
section 2791(b)(5) of the Public Health Service Act),
(4) such coverage is not a grandfathered health plan
(as defined in section 1251 of the Patient Protection
and Affordable Care Act) or a grandmothered health plan
(as defined in section 36B(c)(3)(C) as in effect for
taxable years beginning before January 1, 2020), and
(5) such coverage does not include coverage for
abortions (other than any abortion necessary to save
the life of the mother or any abortion with respect to
a pregnancy that is the result of an act of rape or
incest).
(g) Special Rules.--
(1) Married couples must file joint return.--
(A) In general.--Except as provided in
subparagraph (B), if the taxpayer is married
(within the meaning of section 7703) at the
close of the taxable year, no credit shall be
allowed under this section to such taxpayer
unless such taxpayer and the taxpayer's spouse
file a joint return for such taxable year.
(B) Exception for certain taxpayers.--
Subparagraph (A) shall not apply to any married
taxpayer who--
(i) is living apart from the
taxpayer's spouse at the time the
taxpayer files the tax return,
(ii) is unable to file a joint return
because such taxpayer is a victim of
domestic abuse or spousal abandonment,
(iii) certifies on the tax return
that such taxpayer meets the
requirements of clauses (i) and (ii),
and
(iv) has not met the requirements of
clauses (i), (ii), and (iii) for each
of the 3 preceding taxable years.
(2) Denial of credit to dependents.--
(A) In general.--No credit shall be allowed
under this section to any individual who is a
dependent with respect to another taxpayer for
a taxable year beginning in the calendar year
in which such individual's taxable year begins.
(B) Coordination with rule for older
children.--In the case of any individual who is
a qualifying family member described in
subsection (e)(3) with respect to another
taxpayer for any month, in determining the
amount of any credit allowable to such
individual under this section for any taxable
year of such individual which includes such
month, the monthly limitation amount with
respect to such individual for such month shall
be zero and no amount paid for any qualified
health plan with respect to such individual for
such month shall be taken into account.
(3) Coordination with medical expense deduction.--
Amounts described in subsection (b)(1)(B) with respect
to any month shall not be taken into account in
determining the deduction allowed under section 213
except to the extent that such amounts exceed the
amount described in subsection (b)(1)(A) with respect
to such month.
(4) Coordination with advance payments of credit.--
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
1412 of the Patient Protection and Affordable
Care Act 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 such
section 1412 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).
(5) Special rules for qualified small employer health
reimbursement arrangements.--
(A) In general.--If the taxpayer or any
qualifying family member of the taxpayer is
provided a qualified small employer health
reimbursement arrangement for an eligible
coverage month, the sum determined under
subsection (b)(1)(A) with respect to the
taxpayer shall be reduced (but not below zero)
by \1/12\ of the permitted benefit (as defined
in section 9831(d)(3)(C)) under such
arrangement for each such month such
arrangement is provided to such taxpayer.
(B) Qualified small employer health
reimbursement arrangement.--For purposes of
this paragraph, the term ``qualified small
employer health reimbursement arrangement'' has
the meaning given such term by section
9831(d)(2).
(C) Coverage for less than entire year.--In
the case of an employee who is provided a
qualified small employer health reimbursement
arrangement for less than an entire year,
subparagraph (A) shall be applied by
substituting ``the number of months during the
year for which such arrangement was provided''
for ``12''.
(6) Certain rules related to nonqualified health
plans.--The rules of section 36B(c)(3)(D), as in effect
for taxable years beginning before January 1, 2020,
shall apply with respect to subsection (f)(5).
(7) Inflation adjustment.--
(A) In general.--In the case of any taxable
year beginning in a calendar year after 2020,
each dollar amount in subsection (c)(1), the
$75,000 amount in subsection (c)(2)(B), and the
dollar amount in subsection (c)(3)(A), shall be
increased by an amount equal to--
(i) such dollar amount, multiplied by
(ii) the cost-of-living adjustment
determined under section 1(f)(3) for
the calendar year in which the taxable
year begins, determined--
(I) by substituting
``calendar year 2019'' for
``calendar year 1992'' in
subparagraph (B) thereof, and
(II) by substituting for the
CPI referred to section
1(f)(3)(A) the amount that such
CPI would have been if the
annual percentage increase in
CPI with respect to each year
after 2019 had been one
percentage point greater.
(B) Terms related to CPI.--
(i) Annual percentage increase.--For
purposes of subparagraph (A)(ii)(II),
the term ``annual percentage increase''
means the percentage (if any) by which
CPI for any year exceeds CPI for the
prior year.
(ii) Other terms.--Terms used in this
paragraph which are also used in
section 1(f)(3) shall have the same
meanings as when used in such section.
(C) Rounding.--Any increase determined under
subparagraph (A) shall be rounded to the
nearest multiple of $50.
(8) Rules related to State certification of qualified
health plans.--A certification shall not be taken into
account under subsection (d)(1) unless such
certification is made available to the public and meets
such other requirements as the Secretary may provide.
(9) Regulations.--The Secretary may prescribe such
regulations and other guidance as may be necessary or
appropriate to carry out this section and section 1412
of the Patient Protection and Affordable Care Act.
(h) Verification of Status in United States for Advance
Payment.--No advance payment of the credit allowed under this
section with respect to any amount under subparagraph (A) or
(B) of subsection (b)(1) with respect to any individual shall
be made under section 1412 of the Patient Protection and
Affordable Care Act unless the Secretary has received
confirmation from the Secretary of Health and Human Services
that the Commissioner of Social Security or the Secretary of
Homeland Security has verified under section 1411(c)(2) of such
Act the individual's status as a citizen or national of the
United States or a qualified alien (within the meaning of
section 431 of the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 (8 U.S.C. 1641)) using a process
that includes the appropriate use of information related to
citizenship or immigration status, such as social security
account numbers (but not individual taxpayer identification
numbers).

* * * * * * *

----------

SECTION 2710A OF THE PUBLIC HEALTH SERVICE ACT

[The following shows proposed changes to section 2710A of the
Public Health Service Act as such section is proposed to read
after amendment by section 133 of the American Health Care Act
of 2017 (H.R. 1628, as engrossed in the House):]

SEC. 2710A. ENCOURAGING CONTINUOUS HEALTH INSURANCE COVERAGE.

(a) Penalty Applied.--
(1) In general.--Subject to the succeeding provisions
of this section, a health insurance issuer offering
health insurance coverage in the individual market
shall, in the case of an individual who is an
applicable policyholder of such coverage with respect
to an enforcement period applicable to enrollments for
a plan year beginning with plan year 2019 (or, in the
case of enrollments during a special enrollment period,
beginning with plan year 2018), increase the monthly
premium rate otherwise applicable to such individual
for such coverage during each month of such period, by
an amount determined under paragraph (2).
(2) Amount of penalty.--The amount determined under
this paragraph for an applicable policyholder enrolling
in health insurance coverage described in paragraph (1)
for a plan year, with respect to each month during the
enforcement period applicable to enrollments for such
plan year, is the amount that is equal to 30 percent of
the monthly premium rate otherwise applicable to such
applicable policyholder for such coverage during such
month.
(b) Definitions.--For purposes of this section:
(1) Applicable policyholder.--The term ``applicable
policyholder'' means, with respect to months of an
enforcement period and health insurance coverage, an
individual who--
(A) is a policyholder of such coverage for
such months;
(B) cannot demonstrate that (through
presentation of certifications described in
section 2704(e) or in such other manner as may
be specified in regulations, such as a return
or statement made under section 6055(d) or 36B
of the Internal Revenue Code of 1986), during
the look-back period that is with respect to
such enforcement period, there was not a period
of at least 63 continuous days during which the
individual did not have creditable coverage (as
defined in paragraph (1) of section 2704(c) and
credited in accordance with paragraphs (2) and
(3) of such section); and
(C) in the case of an individual who had been
enrolled under dependent coverage under a group
health plan or health insurance coverage by
reason of section 2714 and such dependent
coverage of such individual ceased because of
the age of such individual, is not enrolling
during the first open enrollment period
following the date on which such coverage so
ceased.
In the case of an individual who applies for advance
payment of a credit under section 1412 of the Patient
Protection and Affordable Care Act and for whom a
determination of eligibility for such advance payment
is delayed by reason of the requirement for
verification of the individual's status in the United
States under section 1411(c)(2) of such Act, the period
of days beginning with the date of application for
advance payment and ending with the date of such
verification shall not be taken into account in
applying subparagraph (B). The Secretary shall
establish a procedure by which information relating to
this period is provided to the individual.
(2) Look-back period.--The term ``look-back period''
means, with respect to an enforcement period applicable
to an enrollment of an individual for a plan year
beginning with plan year 2019 (or, in the case of an
enrollment of an individual during a special enrollment
period, beginning with plan year 2018) in health
insurance coverage described in subsection (a)(1), the
12-month period ending on the date the individual
enrolls in such coverage for such plan year.
(3) Enforcement period.--The term ``enforcement
period'' means--
(A) with respect to enrollments during a
special enrollment period for plan year 2018,
the period beginning with the first month that
is during such plan year and that begins
subsequent to such date of enrollment, and
ending with the last month of such plan year;
and
(B) with respect to enrollments for plan year
2019 or a subsequent plan year, the 12-month
period beginning on the first day of the
respective plan year.

* * * * * * *

----------

PATIENT PROTECTION AND AFFORDABLE CARE ACT

* * * * * * *

TITLE I--QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS

* * * * * * *

Subtitle E--Affordable Coverage Choices for All Americans

PART I--PREMIUM TAX CREDITS AND COST-SHARING REDUCTIONS

* * * * * * *

Subpart B--Eligibility Determinations

[The following shows proposed changes to current law section
1411 of the Patient Protection and Affordable Care Act:]

SEC. 1411. PROCEDURES FOR DETERMINING ELIGIBILITY FOR EXCHANGE
PARTICIPATION, PREMIUM TAX CREDITS AND REDUCED
COST-SHARING, AND INDIVIDUAL RESPONSIBILITY
EXEMPTIONS.

(a) Establishment of Program.--The Secretary shall establish
a program meeting the requirements of this section for
determining--
(1) whether an individual who is to be covered in the
individual market by a qualified health plan offered
through an Exchange, or who is claiming a premium tax
credit or reduced cost-sharing, meets the requirements
of sections 1312(f)(3), 1402(e), and 1412(d) of this
title and section 36B(e) of the Internal Revenue Code
of 1986 that the individual be a citizen or national of
the United States or an alien lawfully present in the
United States;
(2) in the case of an individual claiming a premium
tax credit or reduced cost-sharing under section 36B of
such Code or section 1402--
(A) whether the individual meets the income
and coverage requirements of such sections; and
(B) the amount of the tax credit or reduced
cost-sharing;
(3) whether an individual's coverage under an
employer-sponsored health benefits plan is treated as
unaffordable under sections 36B(c)(2)(C) and
5000A(e)(2); and
(4) whether to grant a certification under section
1311(d)(4)(H) attesting that, for purposes of the
individual responsibility requirement under section
5000A of the Internal Revenue Code of 1986, an
individual is entitled to an exemption from either the
individual responsibility requirement or the penalty
imposed by such section.
(b) Information Required To Be Provided by Applicants.--
(1) In general.--An applicant for enrollment in a
qualified health plan offered through an Exchange in
the individual market shall provide--
(A) the name, address, and date of birth of
each individual who is to be covered by the
plan (in this subsection referred to as an
``enrollee''); and
(B) the information required by any of the
following paragraphs that is applicable to an
enrollee.
(2) Citizenship or immigration status.--The following
information shall be provided with respect to every
enrollee:
(A) In the case of an enrollee whose
eligibility is based on an attestation of
citizenship of the enrollee, the enrollee's
social security number.
(B) In the case of an individual whose
eligibility is based on an attestation of the
enrollee's immigration status, the enrollee's
social security number (if applicable) and such
identifying information with respect to the
enrollee's immigration status as the Secretary,
after consultation with the Secretary of
Homeland Security, determines appropriate.
(3) Eligibility and amount of tax credit or reduced
cost-sharing.--In the case of an enrollee with respect
to whom a premium tax credit or reduced cost-sharing
under section 36B of such Code or section 1402 is being
claimed, the following information:
(A) Information regarding income and family
size.--The information described in section
6103(l)(21) for the taxable year ending with or
within the second calendar year preceding the
calendar year in which the plan year begins.
(B) Certain individual health insurance
policies obtained through small employers.--The
amount of the enrollee's permitted benefit (as
defined in section 9831(d)(3)(C) of the
Internal Revenue Code of 1986) under a
qualified small employer health reimbursement
arrangement (as defined in section 9831(d)(2)
of such Code).
(C) Changes in circumstances.--The
information described in section 1412(b)(2),
including information with respect to
individuals who were not required to file an
income tax return for the taxable year
described in subparagraph (A) or individuals
who experienced changes in marital status or
family size or significant reductions in
income.
(4) Employer-sponsored coverage.--In the case of an
enrollee with respect to whom eligibility for a premium
tax credit under section 36B of such Code or cost-
sharing reduction under section 1402 is being
established on the basis that the enrollee's (or
related individual's) employer is not treated under
section 36B(c)(2)(C) of such Code as providing minimum
essential coverage or affordable minimum essential
coverage, the following information:
(A) The name, address, and employer
identification number (if available) of the
employer.
(B) Whether the enrollee or individual is a
full-time employee and whether the employer
provides such minimum essential coverage.
(C) If the employer provides such minimum
essential coverage, the lowest cost option for
the enrollee's or individual's enrollment
status and the enrollee's or individual's
required contribution (within the meaning of
section 5000A(e)(1)(B) of such Code) under the
employer-sponsored plan.
(D) If an enrollee claims an employer's
minimum essential coverage is unaffordable, the
information described in paragraph (3).
If an enrollee changes employment or obtains additional
employment while enrolled in a qualified health plan
for which such credit or reduction is allowed, the
enrollee shall notify the Exchange of such change or
additional employment and provide the information
described in this paragraph with respect to the new
employer.
(5) Exemptions from individual responsibility
requirements.--In the case of an individual who is
seeking an exemption certificate under section
1311(d)(4)(H) from any requirement or penalty imposed
by section 5000A, the following information:
(A) In the case of an individual seeking
exemption based on the individual's status as a
member of an exempt religious sect or division,
as a member of a health care sharing ministry,
as an Indian, or as an individual eligible for
a hardship exemption, such information as the
Secretary shall prescribe.
(B) In the case of an individual seeking
exemption based on the lack of affordable
coverage or the individual's status as a
taxpayer with household income less than 100
percent of the poverty line, the information
described in paragraphs (3) and (4), as
applicable.
(c) Verification of Information Contained in Records of
Specific Federal Officials.--
(1) Information transferred to Secretary.--An
Exchange shall submit the information provided by an
applicant under subsection (b) to the Secretary for
verification in accordance with the requirements of
this subsection and subsection (d).
(2) Citizenship or immigration status.--
(A) Commissioner of Social Security.--The
Secretary shall submit to the Commissioner of
Social Security the following information for a
determination as to whether the information
provided is consistent with the information in
the records of the Commissioner:
(i) The name, date of birth, and
social security number of each
individual for whom such information
was provided under subsection (b)(2).
(ii) The attestation of an individual
that the individual is a citizen.
(B) Secretary of Homeland Security.--
(i) In general.--In the case of an
individual--
(I) who attests that the
individual is an alien lawfully
present in the United States;
or
(II) who attests that the
individual is a citizen but
with respect to whom the
Commissioner of Social Security
has notified the Secretary
under subsection (e)(3) that
the attestation is inconsistent
with information in the records
maintained by the Commissioner;
the Secretary shall submit to the
Secretary of Homeland Security the
information described in clause (ii)
for a determination as to whether the
information provided is consistent with
the information in the records of the
Secretary of Homeland Security.
(ii) Information.--The information
described in clause (ii) is the
following:
(I) The name, date of birth,
and any identifying information
with respect to the
individual's immigration status
provided under subsection
(b)(2).
(II) The attestation that the
individual is an alien lawfully
present in the United States or
in the case of an individual
described in clause (i)(II),
the attestation that the
individual is a citizen.
(3) Eligibility for tax credit and cost-sharing
reduction.--The Secretary shall submit the information
described in subsection (b)(3)(A) provided under
paragraph (3), (4), or (5) of subsection (b) to the
Secretary of the Treasury for verification of household
income and family size for purposes of eligibility.
(4) Methods.--
(A) In general.--The Secretary, in
consultation with the Secretary of the
Treasury, the Secretary of Homeland Security,
and the Commissioner of Social Security, shall
provide that verifications and determinations
under this subsection shall be done--
(i) through use of an on-line system
or otherwise for the electronic
submission of, and response to, the
information submitted under this
subsection with respect to an
applicant; or
(ii) by determining the consistency
of the information submitted with the
information maintained in the records
of the Secretary of the Treasury, the
Secretary of Homeland Security, or the
Commissioner of Social Security through
such other method as is approved by the
Secretary.
(B) Flexibility.--The Secretary may modify
the methods used under the program established
by this section for the Exchange and
verification of information if the Secretary
determines such modifications would reduce the
administrative costs and burdens on the
applicant, including allowing an applicant to
request the Secretary of the Treasury to
provide the information described in paragraph
(3) directly to the Exchange or to the
Secretary. The Secretary shall not make any
such modification unless the Secretary
determines that any applicable requirements
under this section and section 6103 of the
Internal Revenue Code of 1986 with respect to
the confidentiality, disclosure, maintenance,
or use of information will be met.
(d) Verification by Secretary.--In the case of information
provided under subsection (b) that is not required under
subsection (c) to be submitted to another person for
verification, the Secretary shall verify the accuracy of such
information in such manner as the Secretary determines
appropriate, including delegating responsibility for
verification to the Exchange.
(e) Actions Relating to Verification.--
(1) In general.--Each person to whom the Secretary
provided information under subsection (c) shall report
to the Secretary under the method established under
subsection (c)(4) the results of its verification and
the Secretary shall notify the Exchange of such
results. Each person to whom the Secretary provided
information under subsection (d) shall report to the
Secretary in such manner as the Secretary determines
appropriate.
(2) Verification.--
(A) Eligibility for enrollment and premium
tax credits and cost-sharing reductions.--If
information provided by an applicant under
paragraphs (1), (2), (3), and (4) of subsection
(b) is verified under subsections (c) and (d)--
(i) the individual's eligibility to
enroll through the Exchange and to
apply for premium tax credits and cost-
sharing reductions shall be satisfied;
and
(ii) the Secretary shall, if
applicable, notify the Secretary of the
Treasury under section 1412(c) of the
amount of any advance payment to be
made.
(B) Exemption from individual
responsibility.--If information provided by an
applicant under subsection (b)(5) is verified
under subsections (c) and (d), the Secretary
shall issue the certification of exemption
described in section 1311(d)(4)(H).
(3) Inconsistencies involving attestation of
citizenship or lawful presence.--If the information
provided by any applicant under subsection (b)(2) is
inconsistent with information in the records maintained
by the Commissioner of Social Security or Secretary of
Homeland Security, whichever is applicable, the
applicant's eligibility (other than eligibility for
advance payment of a credit under section 1412) will be
determined in the same manner as an individual's
eligibility under the medicaid program is determined
under section 1902(ee) of the Social Security Act (as
in effect on January 1, 2010).
(4) Inconsistencies involving other information.--
(A) In general.--If the information provided
by an applicant under subsection (b) (other
than subsection (b)(2)) is inconsistent with
information in the records maintained by
persons under subsection (c) or is not verified
under subsection (d), the Secretary shall
notify the Exchange and the Exchange shall take
the following actions:
(i) Reasonable effort.--The Exchange
shall make a reasonable effort to
identify and address the causes of such
inconsistency, including through
typographical or other clerical errors,
by contacting the applicant to confirm
the accuracy of the information, and by
taking such additional actions as the
Secretary, through regulation or other
guidance, may identify.
(ii) Notice and opportunity to
correct.--In the case the inconsistency
or inability to verify is not resolved
under subparagraph (A), the Exchange
shall--
(I) notify the applicant of
such fact;
(II) provide the applicant an
opportunity to either present
satisfactory documentary
evidence or resolve the
inconsistency with the person
verifying the information under
subsection (c) or (d) during
the 90-day period beginning the
date on which the notice
required under subclause (I) is
sent to the applicant.
The Secretary may extend the 90-day
period under subclause (II) for
enrollments occurring during 2014.
(B) Specific actions not involving
citizenship or lawful presence.--
(i) In general.--Except as provided
in paragraph (3), the Exchange shall,
during any period before the close of
the period under subparagraph
(A)(ii)(II), make any determination
under paragraphs (2), (3), and (4) of
subsection (a) on the basis of the
information contained on the
application.
(ii) Eligibility or amount of credit
or reduction.--If an inconsistency
involving the eligibility for, or
amount of, any premium tax credit or
cost-sharing reduction is unresolved
under this subsection as of the close
of the period under subparagraph
(A)(ii)(II), the Exchange shall notify
the applicant of the amount (if any) of
the credit or reduction that is
determined on the basis of the records
maintained by persons under subsection
(c).
(iii) Employer affordability.--If the
Secretary notifies an Exchange that an
enrollee is eligible for a premium tax
credit under section 36B of such Code
or cost-sharing reduction under section
1402 because the enrollee's (or related
individual's) employer does not provide
minimum essential coverage through an
employer-sponsored plan or that the
employer does provide that coverage but
it is not affordable coverage, the
Exchange shall notify the employer of
such fact and that the employer may be
liable for the payment assessed under
section 4980H of such Code.
(iv) Exemption.--In any case where
the inconsistency involving, or
inability to verify, information
provided under subsection (b)(5) is not
resolved as of the close of the period
under subparagraph (A)(ii)(II), the
Exchange shall notify an applicant that
no certification of exemption from any
requirement or payment under section
5000A of such Code will be issued.
(C) Appeals process.--The Exchange shall also
notify each person receiving notice under this
paragraph of the appeals processes established
under subsection (f).
(5) Delay permitted in coverage date in case of delay
in verification of status for individuals applying for
advance payment of credit.--In the case of an
individual whose eligibility for advance payments is
delayed by reason of the requirement for verification
under subsection (c)(2), if, for coverage to be
effective as of the date requested in the individual's
application for enrollment, the individual would (but
for this paragraph) be required to pay 2 or more months
of retroactive premiums, the individual shall be
provided the option to elect to postpone the effective
date of coverage to the date that is not more than 1
month later than the date requested in the individual's
application for enrollment.
(f) Appeals and Redeterminations.--
(1) In general.--The Secretary, in consultation with
the Secretary of the Treasury, the Secretary of
Homeland Security, and the Commissioner of Social
Security, shall establish procedures by which the
Secretary or one of such other Federal officers--
(A) hears and makes decisions with respect to
appeals of any determination under subsection
(e); and
(B) redetermines eligibility on a periodic
basis in appropriate circumstances.
(2) Employer liability.--
(A) In general.--The Secretary shall
establish a separate appeals process for
employers who are notified under subsection
(e)(4)(C) that the employer may be liable for a
tax imposed by section 4980H of the Internal
Revenue Code of 1986 with respect to an
employee because of a determination that the
employer does not provide minimum essential
coverage through an employer-sponsored plan or
that the employer does provide that coverage
but it is not affordable coverage with respect
to an employee. Such process shall provide an
employer the opportunity to--
(i) present information to the
Exchange for review of the
determination either by the Exchange or
the person making the determination,
including evidence of the employer-
sponsored plan and employer
contributions to the plan; and
(ii) have access to the data used to
make the determination to the extent
allowable by law.
Such process shall be in addition to any rights
of appeal the employer may have under subtitle
F of such Code.
(B) Confidentiality.--Notwithstanding any
provision of this title (or the amendments made
by this title) or section 6103 of the Internal
Revenue Code of 1986, an employer shall not be
entitled to any taxpayer return information
with respect to an employee for purposes of
determining whether the employer is subject to
the penalty under section 4980H of such Code
with respect to the employee, except that--
(i) the employer may be notified as
to the name of an employee and whether
or not the employee's income is above
or below the threshold by which the
affordability of an employer's health
insurance coverage is measured; and
(ii) this subparagraph shall not
apply to an employee who provides a
waiver (at such time and in such manner
as the Secretary may prescribe)
authorizing an employer to have access
to the employee's taxpayer return
information.
(g) Confidentiality of Applicant Information.--
(1) In general.--An applicant for insurance coverage
or for a premium tax credit or cost-sharing reduction
shall be required to provide only the information
strictly necessary to authenticate identity, determine
eligibility, and determine the amount of the credit or
reduction.
(2) Receipt of information.--Any person who receives
information provided by an applicant under subsection
(b) (whether directly or by another person at the
request of the applicant), or receives information from
a Federal agency under subsection (c), (d), or (e),
shall--
(A) use the information only for the purposes
of, and to the extent necessary in, ensuring
the efficient operation of the Exchange,
including verifying the eligibility of an
individual to enroll through an Exchange or to
claim a premium tax credit or cost-sharing
reduction or the amount of the credit or
reduction; and
(B) not disclose the information to any other
person except as provided in this section.
(h) Penalties.--
(1) False or fraudulent information.--
(A) Civil penalty.--
(i) In general.--If--
(I) any person fails to
provides correct information
under subsection (b); and
(II) such failure is
attributable to negligence or
disregard of any rules or
regulations of the Secretary,
such person shall be subject, in
addition to any other penalties that
may be prescribed by law, to a civil
penalty of not more than $25,000 with
respect to any failures involving an
application for a plan year. For
purposes of this subparagraph, the
terms ``negligence'' and ``disregard''
shall have the same meanings as when
used in section 6662 of the Internal
Revenue Code of 1986.
(ii) Reasonable cause exception.--No
penalty shall be imposed under clause
(i) if the Secretary determines that
there was a reasonable cause for the
failure and that the person acted in
good faith.
(B) Knowing and willful violations.--Any
person who knowingly and willfully provides
false or fraudulent information under
subsection (b) shall be subject, in addition to
any other penalties that may be prescribed by
law, to a civil penalty of not more than
$250,000.
(2) Improper use or disclosure of information.--Any
person who knowingly and willfully uses or discloses
information in violation of subsection (g) shall be
subject, in addition to any other penalties that may be
prescribed by law, to a civil penalty of not more than
$25,000.
(3) Limitations on liens and levies.--The Secretary
(or, if applicable, the Attorney General of the United
States) shall not--
(A) file notice of lien with respect to any
property of a person by reason of any failure
to pay the penalty imposed by this subsection;
or
(B) levy on any such property with respect to
such failure.
(i) Study of Administration of Employer Responsibility.--
(1) In general.--The Secretary of Health and Human
Services shall, in consultation with the Secretary of
the Treasury, conduct a study of the procedures that
are necessary to ensure that in the administration of
this title and section 4980H of the Internal Revenue
Code of 1986 (as added by section 1513) that the
following rights are protected:
(A) The rights of employees to preserve their
right to confidentiality of their taxpayer
return information and their right to enroll in
a qualified health plan through an Exchange if
an employer does not provide affordable
coverage.
(B) The rights of employers to adequate due
process and access to information necessary to
accurately determine any payment assessed on
employers.
(2) Report.--Not later than January 1, 2013, the
Secretary of Health and Human Services shall report the
results of the study conducted under paragraph (1),
including any recommendations for legislative changes,
to the Committees on Finance and Health, Education,
Labor and Pensions of the Senate and the Committees of
Education and Labor and Ways and Means of the House of
Representatives.

* * * * * * *

VII. DISSENTING VIEWS

H.R. 2581 (Barletta, R-PA) amends H.R. 1628, the American
Health Care Act (AHCA), to require individuals to complete
identity authentication by providing a Social Security number
(SSN) (and disallowing the use of an Individual Taxpayer
Identification number (ITIN)) before receiving any advanceable
tax credit established by the AHCA, as well as advanced premium
tax credits (APTC) provided under current law, and on any tax
return claiming health insurance premium tax credits. The
Barletta bill amends AHCA, which has not passed the Senate or
been enacted into law.
The Barletta bill fails to address the major, underlying
flaws in the bill it amends. According to the nonpartisan,
independent Congressional Budget Office (CBO), the AHCA would
cause 23 million Americans to lose health insurance coverage,
erode important consumer protections, and raise out-of-pocket
health care costs for countless more Americans. H.R. 2581 does
not address any of the problems that would undermine the health
security for millions of working families.
Instead, the Barletta bill could exacerbate the ability to
access affordable coverage that would be created by the AHCA
for working families by increasing administrative barriers,
requiring more government paperwork, and reducing access to
affordable coverage. Ultimately, for someone who is ill,
delayed care could mean the difference between accessing life-
saving treatment and going without much needed care.
The Barletta bill fails to recognize unique circumstances
of American families, forcing a one-size-fits-all approach to
accessing financial help. Not all individuals who are eligible
for tax credits have an SSN or are eligible to obtain an SSN
that can be verified at the time of application. Some people,
like newborns, may not have an SSN at the time their family
applies on their behalf. Other individuals, like domestic
violence survivors and survivors of human trafficking, may have
no need to have an SSN related to work and would experience
delays in accessing health coverage as a result of this
requirement.
Delays in the eligibility process would be significant
because people must enroll during open enrollment or within a
special enrollment period. People can enroll without premium
tax credits (PTCs) but even one or two months of enrollment
without PTCs could result in significant financial hardship.
For some people, like newborn babies, the delay in obtaining an
SSN will be modest (on average, four weeks). Other groups may
experience far longer delays if they must take steps like
getting a work authorization prior to being able to obtain an
SSN. In fact, the legislation itself acknowledges that this new
bureaucratic barrier could cause delays in accessing credits of
more than two months.
Under current law, initial verification of eligibility for
APTCs occurs at the time an individual applies for coverage
through the Marketplace. If an individual does not have an SSN,
or if there is a problem verifying the SSN, a secondary
verification process occurs. Under the law, the agency needs to
notify the consumer of the problem verifying eligibility, and
the applicant has 90 days to provide documentation or otherwise
address the issues. During this verification process,
individuals are presumed eligible to enroll in Marketplace
coverage and, if appropriate, also provided financial
assistance. If the individual is unable to provide
documentation of eligibility, coverage and financial assistance
is terminated. Under current law, individuals are not left in
the position of needing coverage but having to wait potentially
months to receive verification of eligibility for tax credits
to afford that coverage.
This legislation would simply make it harder for
individuals in need of financial assistance to purchase
insurance coverage. Some people would forgo coverage due to the
bureaucratic complications, and others would experience delays
in accessing that coverage.
No evidence exists that says the current process isn't
working or ineligible individuals fraudulently are claiming the
APTCs. Rep. Barletta claims that 500,000 undocumented
immigrants received $750 million in premium tax credits. These
claims are false and there is no evidence that supports these
allegations.
As the source of information to support his claim, Rep.
Barletta has pointed to a February 2016 majority staff report
from the United States Senate Committee on Homeland Security
and Governmental Affairs. However, this report does not make
this claim, rather the report claims that ``as of September 30,
2015, CMS awarded approximately $750 million in APTCs to
individuals enrolled in FFMs who CMS later determined to be
ineligible because the individuals failed to verify their
citizenship, status as a national, or legal presence.''
The report does not make the leap that these individuals
are undocumented immigrants, rather it focuses on their
termination being linked to failure to verify their status.
There is no evidence that suggests these individuals were
undocumented immigrants--only that they never got around to
providing the remaining documentation to keep coverage. This
could have happened for any number of reasons, for example,
they could have abandoned the process because of securing a job
with coverage or moving out of state.
The number of people whose coverage was terminated for
failure to provide necessary documentation continues to
decline. Efforts have become more refined as the program
matures, meaning fewer individuals are experiencing
documentation problems, especially as electronic interfaces
have improved.
Democrats offered two amendments to highlight serious
shortcomings with H.R. 2581 and the continued issue that
President Trump has not released his tax returns. Both
amendments were ruled non-germane by Chairman Kevin Brady (R-
TX) and appealed by Democratic Members. The appeals were then
defeated by party-line votes.
Congresswoman Sanchez (D-CA) offered an amendment to stop
the provisions of H.R. 2581 from taking effect if the Inspector
General of the Department of Health and Human Services
determines that more than three percent (3%) of American
citizens eligible for APTCs experience a disbursement delay. By
having an impartial organization certify this threshold, the
amendment would protect American citizens from suffering a
delay in the disbursement of their APTCs as a result of this
bill. Specifically, this amendment would protect the many APTC-
eligible American citizens most likely to suffer the unintended
consequences of this bill. Low-income American citizens,
particularly naturalized Americans from immigrant families,
have a more difficult time producing the documentation needed
to verify their citizenship. These Americans are also more
likely to have errors in their records because of the spelling
of their surnames or the number of people who share the same
name. This common sense fix would ensure that those who need
coverage the most, including newborn children, will not have to
wait for our system to ``verify'' their status.
Congressman Doggett (D-TX) offered an amendment to require
President Trump to provide his tax returns under the
Committee's oversight authority. The Committee considered this
matter previously. Congress, the Legislative Branch, has the
responsibility and the authority to check the Executive Branch.
As we have discussed, Section 6103 of the tax code allows for
an examination of the President's tax returns--authority put in
place following the Teapot Dome scandal specifically so
Congress could examine conflicts of interest in the Executive
Branch. This is a genuine ``Verify First'' amendment. Before
Congress assumes fraud and delays Americans' access to health
care, we need to verify first how much President Trump and his
family would be enriched by changes made by the AHCA and how
the many corporate entities over which he exercises control
would be enriched. Moreover, we also need to know whether this
is about personal enrichment of President Trump or if it is
about the enrichment of our nation's economy. We also should
take this opportunity to verify that there is no other
conflicts of interest as we move forward in legislation
impacting the tax code.
For the reasons stated above, Democrats opposed this
legislation as it imposes additional and unnecessary
bureaucratic paperwork on working families that are in need of
financial assistance to afford their health insurance premiums.

Richard E. Neal,
Ranking Member.

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