HR 1495 IHCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to make health care coverage more accessible and affordable.CommentsClose CommentsPermalink

March 12, 2009CommentsClose CommentsPermalink

Mr. PAUL introduced the following bill; which was referred to the Committee on Ways and MeansCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to make health care coverage more accessible and affordable.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Comprehensive Health Care Reform Act of 2009’.CommentsClose CommentsPermalink

SEC. 2. REFUNDABLE CREDIT FOR HEALTH CARE COSTS.

(a) In General- Section 35 of the Internal Revenue Code of 1986 (relating to health insurance costs of eligible individuals) is amended to read as follows:CommentsClose CommentsPermalink

‘SEC. 35. HEALTH INSURANCE COSTS.

‘(a) In General- In the case of an individual, there shall be allowed as a credit against the tax imposed by this subtitle an amount equal to the sum of--CommentsClose CommentsPermalink





‘(1) the amount paid by the taxpayer for insurance which constitutes medical care for the taxpayer and the taxpayer’s spouse and dependents, plusCommentsClose CommentsPermalink





‘(2) the amount contributed to a health savings account of the individual (or the individual’s spouse).CommentsClose CommentsPermalink





‘(b) Limitation- The credit allowed by subsection (a) for the taxable year shall not exceed the sum of--CommentsClose CommentsPermalink





‘(1) the taxpayer’s net income tax for the taxable year, plusCommentsClose CommentsPermalink





‘(2) the taxpayer’s Social Security taxes (as defined in section 24(d)) for such taxable year.CommentsClose CommentsPermalink





For purposes of paragraph (1), the term ‘net income tax’ means the sum of the regular tax liability plus the tax imposed by section 55, reduced by the credits allowable under this part (other than this subpart).CommentsClose CommentsPermalink





‘(c) Denial of Double Benefit-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Any amount allowed as a credit under this section shall not be taken into account in determining the amount of any deduction under this chapter.CommentsClose CommentsPermalink





‘(2) COORDINATION WITH HEALTH SAVINGS ACCOUNT CONTRIBUTIONS- For purposes of paragraph (1), amounts taken into account under subsection (a) for a taxable year shall be treated as being attributable to amounts paid for insurance to the extent of such payments.’.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) Section 223(b) of such Code, as amended by section 4, is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(4) COORDINATION WITH CREDIT FOR HEALTH INSURANCE- The limitation under paragraph (1) shall be reduced by the amount treated as being taken into account under section 35(a)(2).’.CommentsClose CommentsPermalink





(2) Section 223(e)(3)(B) of such Code, as amended by section 4, is amended by inserting ‘nor treated as being taken into account under section 35(a)(2)’ before the period at the end.CommentsClose CommentsPermalink





(3) Section 4973(g) of such Code is amended--CommentsClose CommentsPermalink





(A) in paragraph (1) by inserting ‘or a credit under section 35’ after ‘section 223’, andCommentsClose CommentsPermalink





(B) in paragraph (2)(B)(i) by striking ‘maximum’ and inserting ‘sum of the amount treated as being taken into account under section 35(a)(2) plus the’.CommentsClose CommentsPermalink





(4) Section 162 of such Code is amended by striking subsection (l).CommentsClose CommentsPermalink





(5) Chapter 77 of such Code is amended by striking section 7527 and by striking the item relating to section 7527 in the table of sections for such chapter.CommentsClose CommentsPermalink





(6) Subpart B of part III of subchapter A of chapter 61 of such Code is amended by striking section 6050T and by striking the item relating to section 6050T in the table of sections for such chapter.CommentsClose CommentsPermalink





(7) Section 6103(l) of such Code is amended by striking paragraph (18).CommentsClose CommentsPermalink





(8) Section 6103(p) of such Code is amended--CommentsClose CommentsPermalink





(A) in paragraph (3)(A) by striking ‘(17), or (18)’ and inserting ‘or (17)’, andCommentsClose CommentsPermalink





(B) in paragraph (4) by striking ‘or (18)’ after ‘any other person described in subsection (l)(10), (16)’ each place it appears.CommentsClose CommentsPermalink





(9) Section 7213A(a)(1)(B) of such Code is amended by striking ‘subsection (l)(18) or (n) of section 6103’ and inserting ‘section 6103(n)’.CommentsClose CommentsPermalink





(10) Section 6724(d)(1)(B) of such Code is amended by striking clause (xiii).CommentsClose CommentsPermalink





(11) Section 6724(d)(2) of such Code is amended by striking subparagraph (DD).CommentsClose CommentsPermalink





(12) The item relating to section 35 in the table of sections for subpart C of part IV of subchapter A of chapter 1 of such Code is amended to read as follows:CommentsClose CommentsPermalink





‘Sec. 35. Health insurance costs.’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2009.CommentsClose CommentsPermalink

SEC. 3. DISPOSITION OF UNUSED HEALTH BENEFITS IN CAFETERIA PLANS AND FLEXIBLE SPENDING ARRANGEMENTS.

(a) In General- Section 125 of the Internal Revenue Code of 1986 (relating to cafeteria plans) is amended by redesignating subsections (i) and (j) as subsections (j) and (k), respectively, and by inserting after subsection (h) the following:CommentsClose CommentsPermalink





‘(h) Carryforwards or Payments of Certain Unused Health Benefits-CommentsClose CommentsPermalink





‘(1) IN GENERAL- For purposes of this title, a plan or other arrangement shall not fail to be treated as a cafeteria plan solely because qualified benefits under such plan include a health flexible spending arrangement under which not more than $500 of unused health benefits may be--CommentsClose CommentsPermalink





‘(A) carried forward to the succeeding plan year of such health flexible spending arrangement, orCommentsClose CommentsPermalink





‘(B) paid to or on behalf of an employee as compensation as of the end of such plan year or upon the termination of, or failure to re-enroll in, such plan or arrangement.CommentsClose CommentsPermalink





‘(2) DISTRIBUTION OF UNUSED HEALTH BENEFITS ON BEHALF OF EMPLOYEE- For purposes of paragraph (1)(B), unused health benefits paid as compensation on behalf of an employee by the employer shall be--CommentsClose CommentsPermalink





‘(A) includible in gross income and wages of the employee, whether or not a deduction for such payment is allowable under this title to the employee, andCommentsClose CommentsPermalink





‘(B) excludable from--CommentsClose CommentsPermalink





‘(i) gross income to the extent provided under section 402(e), 457(a) (with respect to contributions to an eligible deferred compensation plan (as defined in section 457(b)) of an eligible employer described in section 457(e)(1)(A)), or 220, andCommentsClose CommentsPermalink





‘(ii) wages to the extent otherwise provided for amounts so excludable.CommentsClose CommentsPermalink





‘(3) HEALTH FLEXIBLE SPENDING ARRANGEMENT- For purposes of this subsection, the term ‘health flexible spending arrangement’ means a flexible spending arrangement (as defined in section 106(c)) that is a qualified benefit and only permits reimbursement for expenses for medical care (as defined in section 213(d)(1)) (without regard to subparagraphs (C) and (D) thereof).CommentsClose CommentsPermalink





‘(4) UNUSED HEALTH BENEFITS- For purposes of this subsection, the term ‘unused health benefits’ means the excess of--CommentsClose CommentsPermalink





‘(A) the maximum amount of reimbursement allowable during a plan year under a health flexible spending arrangement, overCommentsClose CommentsPermalink





‘(B) the actual amount of reimbursement during such year under such arrangement.’.CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2009.CommentsClose CommentsPermalink

SEC. 4. STRENGTHENING HEALTH SAVINGS ACCOUNTS.

(a) Repeal of Requirement for Coverage Under High Deductible Health Plan-CommentsClose CommentsPermalink





(1) IN GENERAL- Section 223 of the Internal Revenue Code of 1986 (relating to health savings accounts) is amended by striking subsections (a), (b), and (c) and inserting the following:CommentsClose CommentsPermalink





‘(a) Deduction Allowed- In the case of an individual, there shall be allowed as a deduction for the taxable year an amount equal to the aggregate amount paid in cash during such taxable year by or on behalf of such individual to a health savings account of such individual.CommentsClose CommentsPermalink





‘(b) Limitations-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The amount allowable as a deduction to a taxpayer under subsection (a) for the taxable year shall not exceed $8,000 ($16,000 in the case of a joint return).CommentsClose CommentsPermalink





‘(2) COORDINATION WITH OTHER CONTRIBUTIONS- The limitation which would (but for this paragraph) apply under this subsection to a taxpayer for any taxable year shall be reduced (but not below zero) by the sum of--CommentsClose CommentsPermalink





‘(A) the aggregate amount paid for such taxable year to Archer MSAs of the taxpayer, andCommentsClose CommentsPermalink





‘(B) the aggregate amount contributed to health savings accounts of the taxpayer which is excludable from the taxpayer’s gross income for such taxable year under section 106(d) (and such amount shall not be allowed as a deduction under subsection (a)).CommentsClose CommentsPermalink





‘(3) DENIAL OF DEDUCTION TO DEPENDENTS- No deduction 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.’.CommentsClose CommentsPermalink





(2) CONFORMING AMENDMENTS-CommentsClose CommentsPermalink





(A) Section 223 of such Code is amended by redesignating subsections (d), (e), (f), (g), and (h) as subsections (c), (d), (e), (f), and (g), respectively.CommentsClose CommentsPermalink





(B) Section 223(f) of such Code (as redesignated by subparagraph (A)) is amended to read as follows:CommentsClose CommentsPermalink





‘(f) Cost-of-Living Adjustment-CommentsClose CommentsPermalink





‘(1) IN GENERAL- In the case of any taxable year beginning in a calendar year after 2010, each dollar amount in subsection (b)(1) shall be increased by an amount equal to--CommentsClose CommentsPermalink





‘(A) such dollar amount, multiplied byCommentsClose CommentsPermalink





‘(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which such taxable year begins, determined by substituting ‘calendar year 2009’ for ‘calendar year 1992’ in subparagraph (B) thereof.CommentsClose CommentsPermalink





‘(2) ROUNDING- If any increase under paragraph (1) is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50.’.CommentsClose CommentsPermalink





(C) Section 26(b)(2)(S) of such Code is amended by striking ‘section 223(f)(4)’ and inserting ‘section 223(e)(4)’.CommentsClose CommentsPermalink





(D) Each of the following sections of such Code is amended by striking ‘section 223(d)’ and inserting ‘section 223(c)’:CommentsClose CommentsPermalink





(i) Section 35(g)(3).CommentsClose CommentsPermalink





(ii) Section 106(d)(1).CommentsClose CommentsPermalink





(iii) Section 220(f)(5)(A).CommentsClose CommentsPermalink





(iv) Section 848(e)(1)(B)(v).CommentsClose CommentsPermalink





(v) Section 4973(a)(5).CommentsClose CommentsPermalink





(vi) Section 4973(g).CommentsClose CommentsPermalink





(vii) Section 4975(c)(6).CommentsClose CommentsPermalink





(viii) Section 4975(e)(1)(E).CommentsClose CommentsPermalink





(ix) Section 6051(a)(12).CommentsClose CommentsPermalink





(E) Section 4973(g) of such Code is amended--CommentsClose CommentsPermalink





(i) in paragraph (1) by striking ‘section 223(f)(5)’ and inserting ‘section 223(e)(5)’,CommentsClose CommentsPermalink





(ii) in paragraph (2)(A) by striking ‘section 223(f)(2)’ and inserting ‘section 223(e)(2)’, andCommentsClose CommentsPermalink





(iii) in the matter following paragraph (2) by striking ‘section 223(f)(3)’ and inserting ‘section 223(e)(3)’.CommentsClose CommentsPermalink





(F) Section 4975(c)(6) of such Code is amended by striking ‘section 223(e)(2)’ and inserting ‘section 223(d)(2)’.CommentsClose CommentsPermalink





(G) Section 6693(a)(2)(C) of such Code is amended by striking ‘section 223(h)’ and inserting ‘section 223(g)’.CommentsClose CommentsPermalink





(b) Deduction Allowed for Premium Payments for High Deductible Policies- Section 223(c)(2)(C) of such Code (as amended by subsection (a)) is amended by striking ‘or’ at the end of clause (iii), by striking the period at the end of clause (iv) and inserting ‘, or’, and by inserting after clause (iv) the following new clause:CommentsClose CommentsPermalink





‘(v) a high deductible health plan.’.CommentsClose CommentsPermalink





(c) Purchase of Medigap Policies Permitted- Clause (iv) of section 223(c)(2)(C) of such Code (as amended by this section) is amended by striking ‘other than’ and inserting ‘, including’.CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2009.CommentsClose CommentsPermalink

SEC. 5. REPEAL OF 7.5 PERCENT THRESHOLD ON DEDUCTION FOR MEDICAL EXPENSES.

(a) In General- Subsection (a) of section 213 of the Internal Revenue Code of 1986 (relating to deduction for medical expenses) is amended by striking ‘to the extent that such expenses exceed 7.5 percent of adjusted gross income’.CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by this section shall apply to taxable years beginning after December 31, 2009.CommentsClose CommentsPermalink