SEC. 242. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL.

[a] Definition-

[1] IN GENERAL- For purposes of this division, the term 'affordable credit eligible individual' means, subject to subsection [b], an individual who is lawfully present in a State in the United States [other than as a nonimmigrant described in a subparagraph [excluding subparagraphs [K], [T], [U], and [V]] of section 101[a][15] of the Immigration and Nationality Act]--

[A] who is enrolled under an Exchange-participating health benefits plan and is not enrolled under such plan as an employee [or dependent of an employee] through an employer qualified health benefits plan that meets the requirements of section 312;

[B] with family income below 400 percent of the Federal poverty level for a family of the size involved; and

[C] who is not a Medicaid eligible individual, other than an individual described in section 202[d][3] or an individual during a transition period under section 202[d][4][B][ii].

[2] TREATMENT OF FAMILY- Except as the Commissioner may otherwise provide, members of the same family who are affordable credit eligible individuals shall be treated as a single affordable credit individual eligible for the applicable credit for such a family under this subtitle.

[b] Limitations on Employee and Dependent Disqualification-

[1] IN GENERAL- Subject to paragraph [2], the term 'affordable credit eligible individual' does not include a full-time employee of an employer if the employer offers the employee coverage [for the

employee and dependents] as a full-time employee under a group health plan if the coverage and employer contribution under the plan meet the requirements of section 312.

[2] EXCEPTIONS-

[A] FOR CERTAIN FAMILY CIRCUMSTANCES- The Commissioner shall establish such exceptions and special rules in the case described in paragraph [1] as may be appropriate in the case of a divorced or separated individual or such a dependent of an employee who would otherwise be an affordable credit eligible individual.

[B] FOR UNAFFORDABLE EMPLOYER COVERAGE- Beginning in Y2, in the case of full-time employees for which the cost of the employee premium for coverage under a group health plan would exceed 11 percent of current family income [determined by the Commissioner on the basis of verifiable documentation and without regard to section 245], paragraph [1] shall not apply.

[c] Income Defined-

[1] IN GENERAL- In this title, the term 'income' means modified adjusted gross income [as defined in section 59B of the Internal Revenue Code of 1986].

[2] STUDY OF INCOME DISREGARDS- The Commissioner shall conduct a study that examines the application of income disregards for purposes of this subtitle. Not later than the first day of Y2, the Commissioner shall submit to Congress a report on such study and shall include such recommendations as the Commissioner determines appropriate.

[d] Clarification of Treatment of Affordability Credits- Affordabilty credits under this subtitle shall not be treated, for purposes of title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, to be a benefit provided under section 403 of such title.