II

107TH CONGRESS

1ST SESSION S. 1022

To amend the Internal Revenue Code of 1986 to allow Federal civilian

and military retirees to pay health insurance premiums on a pretax

basis and to allow a deduction for TRICARE supplemental premiums.

IN THE SENATE OF THE UNITED STATES

JUNE 12, 2001

Mr. WARNER 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 Federal civilian and military retirees to pay health insurance

premiums on a pretax basis and to allow a deduction

for TRICARE supplemental premiums.

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

3 SECTION 1. PRETAX PAYMENT OF HEALTH INSURANCE

4 PREMIUMS BY FEDERAL CIVILIAN AND MILI5 TARY RETIREES.

6 (a) IN GENERAL.—Subsection (g) of section 125 of

7 the Internal Revenue Code of 1986 (relating to cafeteria
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1 plans) is amended by adding at the end the following new

2 paragraph:

3 ‘‘(5) HEALTH INSURANCE PREMIUMS OF FED4 ERAL CIVILIAN AND MILITARY RETIREES.—

5 ‘‘(A) FEHBP PREMIUMS.—Nothing in this

6 section shall prevent the benefits of this section

7 from being allowed to an annuitant, as defined

8 in paragraph (3) of section 8901, title 5,

9 United States Code, with respect to a choice be10 tween the annuity or compensation referred to

11 such paragraph and benefits under the health

12 benefits program established by chapter 89 of

13 such title 5.

14 ‘‘(B) TRICARE PREMIUMS.—Nothing in

15 this section shall prevent the benefits of this

16 section from being allowed to an individual re17 ceiving retired or retainer pay by reason of

18 being a member or former member of the uni19 formed services of the United States with re20 spect to a choice between such pay and benefits

21 under the health benefits program established

22 by chapter 55 of title 10, United States Code.’’

23 (b) EFFECTIVE DATE.—The amendment made by

24 this section shall apply to taxable years beginning after

25 the date of the enactment of this Act.
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1 SEC. 2. DEDUCTION FOR TRICARE SUPPLEMENTAL PRE2 MIUMS.

3 (a) IN GENERAL.—Part VII of subchapter B of chap4 ter 1 of the Internal Revenue Code of 1986 (relating to

5 additional itemized deductions for individuals) is amended

6 by redesignating section 223 as section 224 and by insert7 ing after section 222 the following new section:

8 ‘‘SEC. 223. TRICARE SUPPLEMENTAL PREMIUMS OR EN9 ROLLMENT FEES.

10 ‘‘(a) ALLOWANCE OF DEDUCTION.—In the case of an

11 individual, there shall be allowed as a deduction the

12 amounts paid during the taxable year by the taxpayer for

13 insurance purchased as supplemental coverage to the

14 health benefits programs established by chapter 55 of title

15 10, United States Code, for the taxpayer and the tax16 payer’s spouse and dependents.

17 ‘‘(b) COORDINATION WITH MEDICAL DEDUCTION.—

18 Any amount allowed as a deduction under subsection (a)

19 shall not be taken into account in computing the amount

20 allowable to the taxpayer as a deduction under section

21 213(a).’’

22 (b) DEDUCTION ALLOWED WHETHER OR NOT INDI23 VIDUAL ITEMIZES OTHER DEDUCTIONS.—Subsection (a)

24 of section 62 of such Code is amended by inserting after

25 paragraph (18) the following new paragraph:
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1 ‘‘(19) TRICARE SUPPLEMENTAL PREMIUMS OR

2 ENROLLMENT FEES.—The deduction allowed by sec3 tion 223.’’

4 (c) CLERICAL AMENDMENT.—The table of sections

5 for part VII of subchapter B of chapter 1 of such Code

6 is amended by striking the last item and inserting the fol7 lowing new items:

‘‘Sec. 223. TRICARE supplemental premiums or enrollment fees.

‘‘Sec. 224. Cross reference.’’

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

9 this section shall apply to taxable years beginning after

10 the date of the enactment of this Act.

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