To amend the Internal Revenue Code of 1986 to reduce the health insurance costs for family coverage of military reservists called to active duty.

Summary: Mobilized Reserve Family Health Care Act of 2003 - Amends the Internal Revenue Code to allow a tax credit to cover the cost of insurance coverage under TRICARE for a member (and family) of the National Guard or a reserve component of a U.S. Armed Force who has been called or ordered to active duty for a period in excess of 30 days, or for an indefinite period, during such period of duty. Permits a deduction (for both itemizers and nonitemizers), applicable to such period of duty, for insurance costs in addition to the TRICARE costs.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Mobilized Reserve Family Health Care 
Act of 2003''.

SEC. 2. REDUCED HEALTH INSURANCE COSTS FOR FAMILY COVERAGE OF MILITARY 
              RESERVISTS CALLED TO ACTIVE DUTY.

    (a) Refundable Credit for Costs Up to TRICARE Costs.--
            (1) In general.--Subpart C of part IV of subchapter A of 
        chapter 1 of the Internal Revenue Code of 1986 (relating to 
        refundable credits) is amended by inserting after section 35 
        the following new section:

``SEC. 35A. CERTAIN FAMILY COVERAGE HEALTH INSURANCE COSTS OF MILITARY 
              RESERVISTS CALLED TO ACTIVE DUTY.

    ``(a) In General.--In the case of an eligible individual, there 
shall be allowed as a credit against the tax imposed by this subtitle 
an amount equal to the amount paid during the taxable year by the 
taxpayer for insurance which constitutes medical care for the taxpayer 
and the taxpayer's spouse and dependents.
    ``(b) Limitations.--
            ``(1) Credit limited to tricare costs.--The credit allowed 
        by subsection (a) for any period shall not exceed an amount 
        equal to the premium-equivalent of the family coverage cost of 
        coverage under TRICARE for such period.
            ``(2) Limitation to coverage during active duty period.--
        The credit allowed by subsection (a) shall apply only to 
        amounts paid for coverage during the period referred to in 
        subsection (c)(2).
            ``(3) Self-only coverage for reservist not included.--The 
        credit allowed by subsection (a) shall not apply to self-only 
        coverage for the eligible individual.
    ``(c) Eligible Individual.--For purposes of this section, the term 
`eligible individual' means any individual--
            ``(1) who, as a member of the National Guard or a reserve 
        component of an Armed Force of the United States, has been 
        called or ordered to active duty for a period in excess of 30 
        days or for an indefinite period, and
            ``(2) who elects that such individual and all other 
        individuals who would (but for the election) be covered by 
        TRICARE will not be so covered during the period beginning on 
        the date of such call or order and ending on the last day of 
        such active duty.
    ``(d) Denial of Double Benefit.--Amounts allowed as a credit under 
this section shall not be taken into account in determining the amount 
of any deduction or other credit under this chapter.''
            (2) Conforming amendments.--
                    (A) Paragraph (2) of section 1324(b) of title 31, 
                United States Code, is amended by inserting before the 
                period ``, or from section 35A of such Code''.
                    (B) 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 35 the following new item:

                              ``Sec. 35A. Certain family coverage 
                                        health insurance costs of 
                                        military reservists called to 
                                        active duty.''.
    (b) Deduction for Costs in Excess of TRICARE Costs.--
            (1) In general.--Part VII of subchapter B of chapter 1 of 
        such Code (relating to additional itemized deductions for 
        individuals) is amended by redesignating section 223 as section 
        224 and by inserting after section 222 the following new 
        section:

``SEC. 223. CERTAIN FAMILY COVERAGE HEALTH INSURANCE COSTS OF MILITARY 
              RESERVISTS CALLED TO ACTIVE DUTY.

    ``(a) Allowance of Deduction.--In the case of an eligible 
individual (as defined in section 35A(c)), there shall be allowed as a 
deduction an amount equal to the amount paid during the taxable year by 
the taxpayer for insurance which constitutes medical care for the 
taxpayer and the taxpayer's spouse and dependents.
    ``(b) Limitation to Coverage During Active Duty Period.--The 
deduction under this section shall apply only to amounts paid for 
coverage during the period referred to in section 35A(c)(2).
    ``(c) Special Rules.--
            ``(1) Self-only coverage for reservist not included.--The 
        deduction under this section shall not apply to self-only 
        coverage for the eligible individual.
            ``(2) Other rules to apply.--Rules similar to the rules of 
        paragraphs (3), (4), and (5) of section 162(l) shall apply for 
        purposes of this section.''
            (2) Deduction allowed whether or not individual itemizes 
        other deductions.--Subsection (a) of section 62 of such Code is 
        amended by inserting after paragraph (18) the following new 
        paragraph:
            ``(19) Certain family coverage health insurance costs of 
        military reservists called to active duty.--The deduction 
        allowed by section 223.''
            (3) Clerical amendment.--The table of sections for part VII 
        of subchapter B of chapter 1 of such Code is amended by 
        striking the last item and inserting the following new items:

                              ``Sec. 223. Certain family coverage 
                                        health insurance costs of 
                                        military reservists called to 
                                        active duty.
                              ``Sec. 224. Cross reference.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2002.