Title VII, SEC. 7121. ASSESSMENT ON CORPORATE ALLIANCE EMPLOYERS. 
      (a) In General. Subtitle C (relating to employment taxes) is amended by 
    inserting after chapter 24 the following new chapter: 

    ``CHAPTER 24A ASSESSMENT ON CORPORATE ALLIANCE EMPLOYERS 

    ``Sec. 3461. Assessment on corporate alliance employers. 

    ``SEC. 3461. ASSESSMENT ON CORPORATE ALLIANCE EMPLOYERS. 

      ``(a) Imposition of Assessment. Every corporate alliance employer shall 
    pay (in addition to any other amount imposed by this subtitle) for each 
    calendar year an assessment equal to 1 percent of the payroll of such 
    employer. 

      ``(b) Definitions. For purposes of this section 

      ``(1) Corporate alliance employer. The term `corporate alliance employer' 
    means any employer if any individual, by reason of being an employee of 
    such employer, is provided with health coverage through any corporate 
    alliance described in section 1311 of the Health Security Act. 

      ``(2) Payroll. The term `payroll' means the sum of 

      ``(A) the wages (as defined in section 3121(a) without regard to 
    paragraph (1) thereof) paid by the employer during the calendar year, plus 

      ``(B)(i) in the case of a sole proprietorship, the net earnings from 
    self-employment of the proprietor from such trade or business for the 
    taxable year ending with or within the calendar year, 

      ``(ii) in the case of a partnership, the aggregate of the net earnings 
    from self-employment of each partner which is attributable to such 
    partnership for the taxable year of such partnership ending with or within 
    the calendar year, and 

      ``(ii) in the case of an S corporation, the aggregate of the net earnings 
    from self-employment of each shareholder which is attributable to such 
    corporation for the taxable year of such corporation ending with or within 
    the calendar year. 

      ``(3) Net earnings from self-employment. The term `net earnings from 
    self-employment' has the meaning given such term by section 1402; except 
    that the amount thereof 

      ``(A) may never be less than zero, and 

      ``(B) shall be determined without regard to any deduction for an 
    assessment under this section. 

      ``(4) Employer. 

      ``(A) In general. The term `employer' means any person for whom an 
    individual performs services, of whatever nature, as an employee (as 
    defined in section 3401(c)). 

      ``(B) Special rules. 

      ``(i) An individual who owns the entire interest in an unincorporated 
    trade or business shall be treated as his own employer. 

      ``(ii) A partnership shall be treated as the employer of each partner who 
    is an employee within the meaning of section 401(c)(1). 

      ``(iii) An S corporation shall be treated as the employer of each 
    shareholder who is an employee within the meaning of section 401(c)(1). 

      ``(c) Special Rules. For purposes of this section 

      ``(1) Treatment of certain employers. In the case of an employer who is a 
    corporate alliance employer solely by reason of employees who are provided 
    with health coverage through a corporate alliance the eligible sponsor of 
    which is a multiemployer plan described in section 1311(b)(1)(B) of the 
    Health Security Act, the payroll of such employer shall be determined by 
    taking into account only such employees. 

      ``(2) Controlled group rules. All persons treated as a single employer 
    under section 1901 of the Health Security Act (relating to employer 
    premiums for comprehensive health care) shall be treated as a single 
    employer. 

      ``(3) Application of assessment beginning in 1996. 

      ``(A) In general. Every employer eligible to elect to be an eligible 
    sponsor under section 1311 of the Health Security Act shall be treated as a 
    corporate alliance employer as of January 1, 1996, unless the employer 
    waives such employer's rights ever to be treated as such a sponsor. The 
    waiver under this subparagraph shall be irrevocable. 

      ``(B) Exception. Subparagraph (A) shall not apply to any employer 
    referred to in paragraph (1). 

      ``(4) Treatment of federal government. Nothing in any provision of law 
    shall be construed to exempt any agency or instrumentality of the United 
    States from the assessment under this section. 

      ``(d) Administrative Provisions. 

      ``(1) Payment. The assessment under this section shall be paid at the 
    same time and manner as the tax imposed by chapter 21. 

      ``(2) Collection, etc. For purposes of subtitle F, the assessment under 
    this section shall be treated as if it were a tax imposed by this 
    subtitle.'' 

      (b) Clerical Amendment. The table of chapters for subtitle C is amended 
    by inserting after the item relating to chapter 24 the following new item: 

    ``Chapter 24A. Assessment on corporate alliance employers.'' 

      ``(c) Effective Date. The amendments made by this section shall take 
    effect on January 1, 1996.