To amend the Internal Revenue Code of 1986 to provide for equity relating to medical costs.

Summary: Health Equity Act of 2011 - Amends the Internal Revenue Code to: (1) make permanent the tax deduction allowed to self-employed individuals for health insurance costs; (2) allow a new tax deduction for the health care insurance costs of a taxpayer, the taxpayer's spouse, and dependents; and (3) expand the tax deduction for medical expenses to include costs for a membership in a fitness program or athletic club, fitness equipment, or weight loss program up to $1,200 in a taxable year and allow tax-free reimbursements for such expenses up to $1,200 a year under flexible spending arrangements and health reimbursement arrangements.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Health Equity Act of 2011''.

SEC. 2. DEDUCTION FOR HEALTH INSURANCE COSTS IN COMPUTING SELF-
              EMPLOYMENT TAXES MADE PERMANENT.

    (a) In General.--Subsection (l) of section 162 of the Internal 
Revenue Code of 1986 is amended by striking paragraph (4) and by 
redesignating paragraph (5) as paragraph (4).
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2010.

SEC. 3. DEDUCTION FOR QUALIFIED HEALTH INSURANCE COSTS OF INDIVIDUALS.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to additional itemized 
deductions for individuals) is amended by redesignating section 224 as 
section 225 and by inserting after section 223 the following new 
section:

``SEC. 224. COSTS OF QUALIFIED HEALTH INSURANCE.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a deduction an amount equal to the amount paid during the 
taxable year for coverage for the taxpayer, his spouse, and dependents 
under qualified health insurance.
    ``(b) Qualified Health Insurance.--For purposes of this section--
            ``(1) In general.--The term `qualified health insurance' 
        means insurance which constitutes medical care.
            ``(2) Exception.--
                    ``(A) In general.--Paragraph (1) shall not apply to 
                insurance substantially all of the coverage of which is 
                of excepted benefits described in section 9832(c).
                    ``(B) Vision and dental benefits allowed.--
                Subparagraph (A) shall not apply to benefits described 
                in section 9832(c)(2)(A).
    ``(c) Special Rules.--
            ``(1) Coordination with medical deduction, etc.--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 deduction under section 162(l) 
        or 213(a). Any amount taken into account in determining the 
        credit allowed under section 35 or 36B shall not be taken into 
        account for purposes of this section.
            ``(2) Deduction not allowed for self-employment tax 
        purposes.--The deduction allowable by reason of this section 
        shall not be taken into account in determining an individual's 
        net earnings from self-employment (within the meaning of 
        section 1402(a)) for purposes of chapter 2.''.
    (b) Deduction Allowed in Computing Adjusted Gross Income.--
Subsection (a) of section 62 of such Code is amended by inserting 
before the last sentence the following new paragraph:
            ``(22) Costs of qualified health insurance.--The deduction 
        allowed by section 224.''.
    (c) Clerical Amendment.--The table of sections for part VII of 
subchapter B of chapter 1 of such Code is amended by redesignating the 
item relating to section 224 as an item relating to section 225 and 
inserting before such item the following new item:

``Sec. 224. Costs of qualified health insurance.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2010.

SEC. 4. FITNESS PROGRAMS, ATHLETIC CLUBS, FITNESS EQUIPMENT, AND WEIGHT 
              LOSS PROGRAMS TREATED AS MEDICAL CARE.

    (a) Tax Benefits Using Definition of Medical Care.--Subsection (d) 
of section 213 of the Internal Revenue Code of 1986 is amended by 
adding at the end the following:
            ``(12) Fitness programs, athletic clubs, fitness equipment, 
        weight loss programs.--
                    ``(A) In general.--An amount paid in connection 
                with a membership in a fitness program or athletic 
                club, fitness equipment, or weight loss program shall 
                be treated as an amount paid for medical care.
                    ``(B) Limitation.--The amount taken into account 
                under subsection (a) by reason of subparagraph (A) for 
                any taxable year shall not exceed $1,200.''.
    (b) Flexible Spending Arrangements and Health Reimbursement 
Arrangements.--Section 106 of such Code is amended by adding at the end 
the following:
    ``(g) Fitness Programs, Athletic Clubs, Fitness Equipment, Weight 
Loss Programs.--For purposes of this section and section 105--
            ``(1) In general.--Reimbursement for expenses incurred for 
        membership in a fitness program or athletic club, fitness 
        equipment, or weight loss program shall be treated as a 
        reimbursement for medical expenses.
            ``(2) Limitation.--The amount taken into account under 
        paragraph (1) for any taxable year shall not exceed $1,200.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid in taxable years beginning after December 31, 
2010.