S. 673 — Introduced in Senate

II 114th CONGRESS 1st Session S. 673 IN THE SENATE OF THE UNITED STATES March 4, 2015Mr. Sasse introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To provide a transition plan for those individuals who may be affected by ObamaCare’s unlawful implementation. 1. Short title This Act may be cited as the Winding Down ObamaCare Act. 2. Transitional coverage Part C of title XXVII of the Public Health Service Act (42 U.S.C. 300gg–91 et seq.) is amended— (1) by redesignating the second section 2794 (relating to uniform fraud and abuse referral format) as section 2795; and (2) by adding at the end the following: 2796. COBRA-like transitional coverage (a) Plans must provide continuation coverage (1) In general A health insurance issuer shall provide, in accordance with this section, that each enrollee in a qualified health plan who would lose coverage under the plan, or who would no longer be eligible for a tax credit under section 36B of the Internal Revenue Code of 1986, as a result of a qualifying event is entitled, under the plan, to elect, within the election period, continuation coverage under the plan. (2) Coverage For purposes of this section, the term continuation coverage means coverage that meets the following requirements: (A) Type of coverage The coverage must consist of that coverage which the enrollee was enrolled in at the time of the qualifying event, except that if such coverage is later modified under the plan for any group of similarly situated enrollees, such coverage shall also be modified in the same manner for all individuals to which this section applies. (B) Premium requirement The health insurance issuer may require payment of a premium for such coverage for any period of the continuation coverage, except that such premium— (i) shall not exceed 100 percent of the premium amount applicable for the qualified health plan involved on the day before the qualifying event; (ii) shall not increase at any time during the period of continuation coverage; and (iii) may, at the election of the enrollee, be paid in monthly installments. (b) Qualifying event For purposes of this section, the term qualifying event means, with respect to any enrollee in a qualified health plan, a determination by the Supreme Court of the United States in the case of King v. Burwell (2015) that would result in— (1) the enrollee losing coverage under the plan; or (2) making the enrollee ineligible to receive a tax credit under section 36B of the Internal Revenue Code of 1986 with respect to such plan. (c) Coverage period (1) In general Except as provided in paragraph (2), the continuation coverage provided for under this section shall extend for at least the period beginning on the date of the qualifying event and ending: (A) The date that is 18 months after the date of the qualifying event. (2) Termination Notwithstanding paragraph (1), the continuation coverage provided for under this section shall terminate with respect to an enrollee on— (A) the date on which the issuer ceases to provide any qualified health plans to individuals (if any); and (B) the date on which coverage ceases under the plan by reason of a failure to make timely payment of any premium required under the plan with respect to the enrollee. (d) Election period For purposes of this section, the term election period means the period which— (1) begins on the date on which the qualifying event occurs; and (2) ends 60 days after such date. (e) Notice The Secretary shall ensure that— (1) a health insurance issuer shall provide, not later than 10 days after the date of a qualifying event, written notice to each enrollee in a qualified health plan of the rights provided under this section and the deadlines for exercising such rights, including a statement that any continuation coverage under this section shall expire as provided for in subsection (c); and (2) each enrollee in a qualified health plan is responsible for notifying the health insurance issuer involved, within 45 days of receiving the notice under paragraph (1), of the intent of the enrollee to exercise the rights provided to the enrollee under this section. . 3. Preventing bureaucratic workarounds (a) In general The Secretary of Health and Human Services shall not enter into a new contract with a State to make available to the State technology that is otherwise utilized as part of the Federal health insurance exchange established under section 1321 of the Patient Protection and Affordable Care Act (42 U.S.C. 18041). (b) Rule of construction Nothing in subsection (a) shall be construed to prohibit a State from establishing a State-based Exchange. 4. Transitional financial assistance (a) Allowance of tax credit Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 36B the following new section: 36C. Credit for transitional coverage (a) In general In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by subtitle A an amount equal to the applicable percentage of the amount paid by the taxpayer for coverage of the taxpayer and qualifying family members under continuation coverage for eligible coverage months beginning in the taxable year. (b) Applicable percentage For purposes of subsection (a), the applicable percentage is 65 percent reduced by 5 percentage points for each coverage month for which a credit is allowable to the taxpayer under this section after the sixth such coverage month. (c) Eligible individual For purposes of this section— (1) In general The term eligible individual means any individual who elects to retain continuation of coverage under section 2796 of the Public Health Service Act. (2) Identification requirements The term eligible individual shall not include any individual for any month unless the policy number associated with the qualified health insurance and the TIN of each eligible individual covered under such health insurance for such month are included on the return of tax for the taxable year in which such month occurs. (d) Coverage month For purposes of this section— (1) In general The term coverage month means any month if as of the first date of such month the taxpayer is an eligible individual who does not have other specified coverage. (2) Other specified coverage For purposes of paragraph (1), an individual has other specified coverage for any month if, as of the first day of such month if such individual— (A) is covered under employer-provided health insurance, (B) is entitled to benefits under part A of title XVIII of the Social Security Act or is enrolled under part B of such title, (C) is enrolled under the program under title XIX or XXI of such Act (other than under section 1928 of such Act), or (D) is entitled to benefits under chapter 55 of title 10, United States Code. (e) Other definitions For purposes of this section— (1) Continuation coverage The term continuation coverage means coverage described in section 2796(a)(2) of the Public Health Service Act. (2) Qualifying family member The term qualifying family member has the meaning given such term under section 35(d). (f) Special rules (1) Limitation on amount of credit With respect to any taxable year, 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 7527A for months beginning in such taxable year. (2) Coordination with medical deduction Any amount paid by a taxpayer for insurance to which subsection (a) applies shall not be taken into account in computing the amount allowable to the taxpayer as a credit under this chapter or as a deduction under section 213(a). (3) 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. (4) Married couples must file joint return (A) In general If the taxpayer is married at the close of the taxable year, the credit shall be allowed under subsection (a) only if the taxpayer and his spouse file a joint return for the taxable year. (B) Marital status; certain married individuals living apart Rules similar to the rules of paragraphs (3) and (4) of section 21(e) shall apply for purposes of this paragraph. (5) Verification of coverage, etc The Secretary shall ensure that procedures are in place to ensure that the coverage eligibility of the individual is verified. (6) Insurance which covers other individuals; treatment of payments; etc. Rules similar to the rules of paragraphs (7) and (8) of section 35(g) shall apply for purposes of this section. . (b) Advance payment of credit Chapter 77 of the Internal Revenue Code of 1986 is amended by inserting after section 7527 the following new section: 7527A. Advance payment of transitional continuation coverage credit (a) In general The Secretary shall establish a program for making payments on behalf of taxpayers who are eligible individuals within the meaning of section 36C(c) to providers of continuation coverage (as defined in section 36C(e)(1)) for such individuals. (b) Limitation The Secretary may make payments under subsection (a) only to the extent that the Secretary determines that the amount of such payments made on behalf of any taxpayer for any month does not exceed the applicable percentage under section 36C(b) for the taxpayer for such month. . (c) Information reporting (1) In general Subpart B of part III of subchapter A of chapter 61 of the Internal Revenue Code of 1986 is amended by inserting after section 6050W the following new section: 6050X. Returns relating to continuation coverage credit (a) Requirement of reporting Every person who is entitled to receive payments for any month of any calendar year under section 7527A with respect to any individual shall make the return described in subsection (b) with respect to each such individual. (b) Form and manner of returns A return is described in this subsection if such return— (1) is in such form as the Secretary may prescribe, and (2) contains, with respect to each individual referred to in subsection (a)— (A) the name, address, and TIN of each such individual, (B) the months for which amounts payments under section 7527A were received, (C) the amount of each such payment, (D) the type of insurance coverage provided by such person with respect to such individual and the policy number associated with such coverage, if applicable, (E) the name, address, and TIN of the spouse and each dependent covered under such coverage, and (F) such other information as the Secretary may prescribe. (c) Statements To be furnished to individuals with respect to whom information is required Every person required to make a return under subsection (a) shall furnish to each individual whose name is required to be set forth in such return a written statement showing— (1) the name and address of the person required to make such return and the phone number of the information contact for such person, and (2) the information required to be shown on the return with respect to such individual. The written statement required under the preceding sentence shall be furnished on or before January 31 of the year following the calendar year for which the return under subsection (a) is required to be made. . (2) Assessable penalties (A) Subparagraph (B) of section 6724(d)(1) of such Code is amended by striking or at the end of clause (xxiv), by striking and at the end of clause (xxv) and inserting or, and by inserting after clause (xxiii) the following new clause: (xxvii) section 6050X (relating to returns relating to qualified health insurance credit), and . (B) Paragraph (2) of section 6724(d) of such Code is amended by striking or at the end of subparagraph (GG), by striking the period at the end of subparagraph (HH) and inserting , or, and by inserting after subparagraph (HH) the following new subparagraph: (II) section 6050X (relating to returns relating to qualified health insurance credit). . (d) Conforming amendments (1) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting 36C, after 36B,. (2) The table of sections for subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 36B the following new item: Sec. 36C. Credit for continuation coverage under a qualified health plan. . (3) The table of sections for chapter 77 of such Code is amended by inserting after the item relating to section 7527 the following new item: Sec. 7527A. Advance payment of continuation coverage credit. . (4) The table of sections for subpart B of part III of subchapter A of chapter 61 of such Code is amended by adding at the end the following new item: Sec. 6050X. Returns relating to continuation coverage credit. . (e) Effective date The amendments made by this section shall apply to coverage months beginning after the date of a qualifying event determined under section 2796(b) of the Public Health Service Act (as added by section 2) with respect to the individual. 5. Stopping bureaucrats from spending taxpayer dollars (a) In general Section 1115 of the Social Security Act (42 U.S.C. 1315) is amended by adding at the end the following: (g) No experimental, pilot, or demonstration project undertaken under subsection (a) to promote the objectives of title XIX shall be approved, renewed, or extended unless— (1) the Secretary establishes spending limits for the project (which may be annual per population-based limits, aggregate limits (annual or for the waiver period), or a combination thereof) only by applying benchmark growth rates that are determined based on the average of the most recent estimates of nationwide Medicaid beneficiary costs and enrollment growth produced by the Director of the Congressional Budget Office and the Director of the Office of Management and Budget, respectively; and (2) the establishment and application of such spending limits to the project and the estimated savings resulting from the project are reviewed and certified by an individual who is a member of the American Academy of Actuaries or the Society of Actuaries, using generally accepted actuarial principles and methodologies, and who is not a Federal officer or employee. . (b) Effective date The amendment made by subsection (a) takes effect on the date of enactment of this Act and applies to Medicaid waivers approved, renewed, or extended under section 1115 of the Social Security Act (42 U.S.C. 1315) after that date.