I 

109TH CONGRESS 

1ST SESSION H. R. 51 

To amend the Internal Revenue Code of 1986 to increase the dollar limitation 

on employer-provided group term life insurance that can be excluded 

from the gross income of the employee. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 4, 2005 

Mr. BURGESS introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to increase 

the dollar limitation on employer-provided group term 

life insurance that can be excluded from the gross income 

of the employee. 

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

3 SECTION 1. FINDINGS. 

4 Congress finds the following: 

5 (1) The primary purpose of group term life in6 surance is to provide families with protection against 

7 the economic loss arising from the death of the prin8 cipal family income producer. 
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1 (2) The Revenue Act of 1964 (Public Law 88– 

2 272) required individuals to pay an imputed income 

3 tax on the current value of employer-provided group 

4 term life insurance policies of more than $50,000. 

5 (3) The value of the $50,000 limitation has 

6 steadily decreased since 1964 because the limitation 

7 was not indexed for inflation. 

8 (4) The number of individuals affected by the 

9 $50,000 limitation in 1964 was estimated to be 

10 somewhere between 0.5 percent and 1 percent of the 

11 total number of individuals who received employer 

12 sponsored group term life insurance. 

13 (5) The Department of the Treasury estimated 

14 that in 1999, 18.1 percent of employees receiving 

15 group term life insurance were affected by the 

16 $50,000 limitation (13.6 million of the 75 million 

17 total recipients of employer sponsored group term 

18 life insurance). 

19 (6) If the $50,000 limitation had been indexed 

20 for inflation in 1964, the limitation would have been 

21 approximately $300,000 by 2004. 
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1 SEC. 2. INCREASE IN LIMITATION ON EXCLUSION FOR EM2 PLOYER-PROVIDED GROUP TERM LIFE IN3 SURANCE PURCHASED FOR EMPLOYEES. 

4 (a) IN GENERAL.—Paragraph (1) of section 79(a) of 

5 the Internal Revenue Code of 1986 is amended by striking 

6 ‘‘$50,000’’ and inserting ‘‘$300,000’’. 

7 (b) INFLATION ADJUSTMENT.—Section 79 of such 

8 Code (relating to group-term life insurance purchased for 

9 employees) is amended by adding at the end the following 

10 new subsection: 

11 ‘‘(f) INFLATION ADJUSTMENT.— 

12 ‘‘(1) IN GENERAL.—In the case of a taxable 

13 year beginning after 2005, the $300,000 amount 

14 under subsection (a)(1) shall be increased by an 

15 amount equal to— 

16 ‘‘(A) such dollar amount, multiplied by 

17 ‘‘(B) the cost-of-living adjustment deter18 mined under section 1(f)(3) for the calendar 

19 year in which the taxable year begins, deter20 mined by substituting ‘2004’ for ‘1992’ in sub21 paragraph (B) thereof. 

22 ‘‘(2) ROUNDING.—If any amount as adjusted 

23 under paragraph (1) is not a multiple of $10,000, 

24 such amount shall be rounded to the nearest mul25 tiple of $10,000.’’. 
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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2004. 

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