II 

109TH CONGRESS 

2D SESSION S. 2379 

To amend the Internal Revenue Code of 1986 to allow a deduction for 

health and long-term care insurance costs of individuals not participating 

in employer-subsidized health plans. 

IN THE SENATE OF THE UNITED STATES 

MARCH 7, 2006 

Mr. BURR introduced the following bill; which was read twice and referred to 

the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to allow a 

deduction for health and long-term care insurance costs 

of individuals not participating in employer-subsidized 

health plans. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. DEDUCTION FOR HEALTH AND LONG-TERM 

4 CARE INSURANCE COSTS OF INDIVIDUALS 

5 NOT PARTICIPATING IN EMPLOYER-SUB6 SIDIZED HEALTH PLANS. 

7 (a) IN GENERAL.—Part VII of subchapter B of chap8 ter 1 of the Internal Revenue Code of 1986 is amended 


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1 by redesignating section 224 as section 225 and by insert2 ing after section 223 the following new section: 

3 ‘‘SEC. 224. HEALTH AND LONG-TERM CARE INSURANCE 

4 COSTS. 

5 ‘‘(a) IN GENERAL.—In the case of an individual, 

6 there shall be allowed as a deduction an amount equal to 

7 the amount paid during the taxable year for insurance 

8 which constitutes medical care for the taxpayer and the 

9 taxpayer’s spouse and dependents. 

10 ‘‘(b) LIMITATION BASED ON OTHER COVERAGE.— 

11 ‘‘(1) COVERAGE UNDER CERTAIN SUBSIDIZED

12 EMPLOYER PLANS.— 

13 ‘‘(A) IN GENERAL.—Subsection (a) shall 

14 not apply to any taxpayer for any calendar 

15 month for which the taxpayer participates in 

16 any health plan maintained by any employer of 

17 the taxpayer or of the spouse of the taxpayer if 

18 any of the cost of coverage under such plan (de19 termined under section 4980B and without re20 gard to payments made with respect to any cov21 erage described in subsection (d)) is paid or in22 curred by the employer. 

23 ‘‘(B) EMPLOYER CONTRIBUTIONS TO CAF24 ETERIA PLANS, FLEXIBLE SPENDING ARRANGE25 MENTS, ARCHER MSAS, AND HEALTH SAVINGS


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1 ACCOUNTS.—Employer contributions to a cafe2 teria plan, a flexible spending or similar ar3 rangement, an Archer MSA, or a health savings 

4 account which are excluded from gross income 

5 under section 106 shall be treated for purposes 

6 of subparagraph (A) as paid by the employer. 

7 ‘‘(C) AGGREGATION OF PLANS OF EM8 PLOYER.—A health plan which is not otherwise 

9 described in subparagraph (A) shall be treated 

10 as described in such subparagraph if such plan 

11 would be so described if all health plans of per12 sons treated as a single employer under sub13 section (b), (c), (m), or (o) of section 414 were 

14 treated as one health plan. 

15 ‘‘(D) SEPARATE APPLICATION TO HEALTH

16 INSURANCE AND LONG-TERM CARE INSUR17 ANCE.—Subparagraphs (A) and (C) shall be 

18 applied separately with respect to— 

19 ‘‘(i) plans which include primarily cov20 erage for qualified long-term care services 

21 or are qualified long-term care insurance 

22 contracts, and 

23 ‘‘(ii) plans which do not include such 

24 coverage and are not such contracts. 


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1 ‘‘(2) COVERAGE UNDER CERTAIN FEDERAL

2 PROGRAMS.— 

3 ‘‘(A) IN GENERAL.—Subsection (a) shall 

4 not apply to any amount paid for any coverage 

5 for an individual for any calendar month if, as 

6 of the first day of such month, the individual is 

7 covered under any medical care program de8 scribed in— 

9 ‘‘(i) title XVIII, XIX, or XXI of the 

10 Social Security Act, 

11 ‘‘(ii) chapter 55 of title 10, United 

12 States Code, 

13 ‘‘(iii) chapter 17 of title 38, United 

14 States Code, 

15 ‘‘(iv) chapter 89 of title 5, United 

16 States Code, or 

17 ‘‘(v) the Indian Health Care Improve18 ment Act. 

19 ‘‘(B) EXCEPTIONS.— 

20 ‘‘(i) QUALIFIED LONG-TERM CARE.— 

21 Subparagraph (A) shall not apply to 

22 amounts paid for coverage under a quali23 fied long-term care insurance contract. 

24 ‘‘(ii) CONTINUATION COVERAGE OF

25 FEHBP.—Subparagraph (A)(iv) shall not 


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1 apply to coverage which is comparable to 

2 continuation coverage under section 

3 4980B. 

4 ‘‘(c) LONG-TERM CARE DEDUCTION LIMITED TO

5 QUALIFIED LONG-TERM CARE INSURANCE CON6 TRACTS.—In the case of a qualified long-term care insur7 ance contract, only eligible long-term care premiums (as 

8 defined in section 213(d)(10)) may be taken into account 

9 under subsection (a). 

10 ‘‘(d) DEDUCTION NOT AVAILABLE FOR PAYMENT OF

11 ANCILLARY COVERAGE PREMIUMS.—Any amount paid as 

12 a premium for insurance which provides for— 

13 ‘‘(1) coverage for accidents, disability, dental 

14 care, vision care, or a specified illness, or 

15 ‘‘(2) making payments of a fixed amount per 

16 day (or other period) by reason of being hospitalized, 

17 shall not be taken into account under subsection (a). 

18 ‘‘(e) SPECIAL RULES.— 

19 ‘‘(1) COORDINATION WITH DEDUCTION FOR

20 HEALTH INSURANCE COSTS OF SELF-EMPLOYED IN21 DIVIDUALS.—The amount taken into account by the 

22 taxpayer in computing the deduction under section 

23 162(l) shall not be taken into account under this 

24 section. 


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1 ‘‘(2) COORDINATION WITH MEDICAL EXPENSE

2 DEDUCTION.—The amount taken into account by 

3 the taxpayer in computing the deduction under this 

4 section shall not be taken into account under section 

5 213. 

6 ‘‘(f) REGULATIONS.—The Secretary shall prescribe 

7 such regulations as may be appropriate to carry out this 

8 section, including regulations requiring employers to re9 port to their employees and the Secretary such informa10 tion as the Secretary determines to be appropriate.’’. 

11 (b) DEDUCTION ALLOWED WHETHER OR NOT TAX12 PAYER ITEMIZES OTHER DEDUCTIONS.—Subsection (a) 

13 of section 62 of the Internal Revenue Code of 1986 is 

14 amended by inserting before the last sentence the fol15 lowing new item: 

16 ‘‘(21) HEALTH AND LONG-TERM CARE INSUR17 ANCE COSTS.—The deduction allowed by section 

18 224.’’. 

19 (c) CONFORMING AMENDMENTS.— 

20 (1) Sections 86(b)(2), 135(c)(4), 137(b)(3), and 

21 219(g)(3) of the Internal Revenue Code of 1986 are 

22 each amended by inserting ‘‘224,’’ after ‘‘222,’’. 

23 (2) Section 221(b)(2)(C) of such Code is 

24 amended by inserting ‘‘224,’’ before ‘‘911’’. 


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1 (3) Section 469(i)(3)(F) of such Code is 

2 amended by striking ‘‘and 222’’ and inserting ‘‘, 

3 222, and 224’’. 

4 (4) The table of sections for part VII of sub5 chapter B of chapter 1 of such Code is amended by 

6 striking the last item and inserting the following 

7 new items: 

‘‘Sec. 224. Health and long-term care insurance costs. 

‘‘Sec. 225. Cross reference.’’. 

8 (d) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to taxable years beginning after 

10 December 31, 2006. 

Æ 


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