I 

111TH CONGRESS 

1ST SESSION H. R. 1203 

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 HOUSE OF REPRESENTATIVES 

FEBRUARY 25, 2009 

Mr. VAN HOLLEN (for himself, Mr. WOLF, Mr. CONNOLLY of Virginia, Mr. 

HOYER, Mr. GRIJALVA, Mr. HOLT, Mr. PLATTS, Mr. MORAN of Virginia, 

Mr. LYNCH, Mr. KILDEE, Ms. KILPATRICK of Michigan, Mr. HASTINGS

of Florida, Mr. SARBANES, Mr. RUPPERSBERGER, Ms. NORTON, Mr. 

YARMUTH, and Mr. DAVIS of Illinois) introduced the following bill; which 

was referred to the Committee on Ways and Means, and in addition to 

the Committees on Oversight and Government Reform and Armed Services, for a period to be subsequently determined by the Speaker, in each 

case for consideration of such provisions as fall within the jurisdiction of 

the committee concerned 

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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Federal and Military 

3 Retiree Health Care Equity Act’’. 

4 SEC. 2. PRETAX PAYMENT OF HEALTH INSURANCE PRE5 MIUMS BY FEDERAL CIVILIAN AND MILITARY 

6 RETIREES. 

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

8 the Internal Revenue Code of 1986 (relating to cafeteria 

9 plans) is amended by adding at the end the following new 

10 paragraph: 

11 ‘‘(5) HEALTH INSURANCE PREMIUMS OF FED12 ERAL CIVILIAN AND MILITARY RETIREES.— 

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

14 section shall prevent the benefits of this section 

15 from being allowed to an annuitant, as defined 

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

17 United States Code, with respect to a choice be18 tween the annuity or compensation referred to 

19 in such paragraph and benefits under the 

20 health benefits program established by chapter 

21 89 of such title 5. 

22 ‘‘(B) TRICARE PREMIUMS.—Nothing in 

23 this section shall prevent the benefits of this 

24 section from being allowed to an individual re25 ceiving retired or retainer pay by reason of 

26 being a member or former member of the uniVerDate Nov 24 2008 03:29 Feb 27, 2009 Jkt 079200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1203.IH H1203

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1 formed services of the United States with re2 spect to a choice between such pay and benefits 

3 under the health benefits programs established 

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

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

6 this section shall apply to taxable years beginning after 

7 the date of the enactment of this Act. 

8 SEC. 3. DEDUCTION FOR TRICARE SUPPLEMENTAL PRE9 MIUMS. 

10 (a) IN GENERAL.—Part VII of subchapter B of chap11 ter 1 of the Internal Revenue Code of 1986 (relating to 

12 additional itemized deductions for individuals) is amended 

13 by redesignating section 224 as section 225 and by insert14 ing after section 223 the following new section: 

15 ‘‘SEC. 224. TRICARE SUPPLEMENTAL PREMIUMS OR EN16 ROLLMENT FEES. 

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

18 individual, there shall be allowed as a deduction the 

19 amounts paid during the taxable year by the taxpayer for 

20 insurance purchased as supplemental coverage to the 

21 health benefits programs established by chapter 55 of title 

22 10, United States Code, for the taxpayer and the tax23 payer’s spouse and dependents. 

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

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


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1 shall not be taken into account in computing the amount 

2 allowable to the taxpayer as a deduction under section 

3 213(a).’’. 

4 (b) DEDUCTION ALLOWED WHETHER OR NOT INDI5 VIDUAL ITEMIZES OTHER DEDUCTIONS.—Subsection (a) 

6 of section 62 of such Code is amended by inserting before 

7 the last sentence the following new paragraph: 

8 ‘‘(22) TRICARE SUPPLEMENTAL PREMIUMS

9 OR ENROLLMENT FEES.—The deduction allowed by 

10 section 224.’’. 

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

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

13 is amended by striking the last item and inserting the fol14 lowing new items: 

‘‘Sec. 224. TRICARE supplemental premiums or enrollment fees. 

‘‘Sec. 225. Cross reference.’’. 

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

16 this section shall apply to taxable years beginning after 

17 the date of the enactment of this Act. 

18 SEC. 4. IMPLEMENTATION. 

19 (a) FEHBP PREMIUM CONVERSION OPTION FOR

20 FEDERAL CIVILIAN RETIREES.—The Director of the Of21 fice of Personnel Management shall take such actions as 

22 the Director considers necessary so that the option made 

23 possible by section 125(g)(5)(A) of the Internal Revenue 

24 Code of 1986 shall be offered beginning with the first open 


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1 enrollment period afforded under chapter 89 of title 5, 

2 United States Code, which begins not less than 90 days 

3 after the date of the enactment of this Act. 

4 (b) TRICARE PREMIUM CONVERSION OPTION FOR

5 MILITARY RETIREES.—The Secretary of Defense, after 

6 consulting with the other administering Secretaries (as 

7 specified in section 1073 of title 10, United States Code), 

8 shall take such actions as the Secretary considers nec9 essary so that the option made possible by section 

10 125(g)(5)(B) of the Internal Revenue Code of 1986 shall 

11 be offered beginning with the first open enrollment period 

12 afforded under health benefits programs established under 

13 chapter 55 of such title which begins not less than 90 days 

14 after the date of the enactment of this Act. 

Æ 


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