I 

117TH CONGRESS 

2D SESSION H. R. 7107 

To amend the Internal Revenue Code of 1986 to expand the use of retirement 

plan funds to obtain long-term care insurance, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 16, 2022 

Mrs. WAGNER introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Education and Labor, 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 expand 

the use of retirement plan funds to obtain long-term 

care insurance, and for other purposes. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Long-Term Care Af5 fordability Act’’. 


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1 SEC. 2. LONG-TERM CARE CONTRACTS PURCHASED WITH 

2 RETIREMENT PLAN DISTRIBUTIONS. 

3 (a) IN GENERAL.—Section 402 of the Internal Rev4 enue Code of 1986 is amended by adding at the end the 

5 following new subsection: 

6 ‘‘(m) DISTRIBUTIONS WITH RESPECT TO LONG7 TERM CARE INSURANCE.— 

8 ‘‘(1) EXCLUSION.— 

9 ‘‘(A) IN GENERAL.—Gross income of an 

10 individual for the taxable year does not include 

11 any distribution from an eligible retirement 

12 plan to the extent that the aggregate amount of 

13 such distributions does not exceed the amount 

14 paid by or assessed to such individual during 

15 the taxable year for or with respect to coverage 

16 described in subparagraph (B) for the indi17 vidual, the individual’s spouse, or a dependent 

18 (as defined in section 152, determined without 

19 regard to subsections (b)(1), (b)(2), and 

20 (d)(1)(B) thereof) of the individual. 

21 ‘‘(B) COVERAGE DESCRIBED.—Coverage 

22 described in this subparagraph is— 

23 ‘‘(i) a qualified long-term care insur24 ance contract (as defined in section 

25 7702B(b)) covering qualified long-term 


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1 care services (as defined in section 

2 7702B(c)), and 

3 ‘‘(ii) coverage of the risk that an in4 sured individual would become a chron5 ically ill individual (within the meaning of 

6 section 101(g)(4)(B)) under a rider or 

7 other provision of a life insurance contract 

8 which satisfies the requirements of section 

9 101(g)(3) (determined without regard to 

10 subparagraph (D) thereof). 

11 ‘‘(2) LIMITATION.— 

12 ‘‘(A) IN GENERAL.—The amount excluded 

13 from gross income under paragraph (1) for any 

14 taxable year shall not exceed $2,500 with re15 spect to payments for coverage for any insured 

16 individual. 

17 ‘‘(B) EXCLUSION AVAILABLE ONLY TO 1

18 TAXPAYER.—The exclusion under paragraph 

19 (1) shall be allowed to only 1 taxpayer for any 

20 taxable year with respect to any 1 insured indi21 vidual. 

22 ‘‘(C) ADJUSTMENT FOR INFLATION.— 

23 ‘‘(i) IN GENERAL.—In the case of any 

24 taxable year beginning after December 31, 

25 2021, the $2,500 amount in subparagraph 


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1 (A) shall be increased by an amount equal 

2 to— 

3 ‘‘(I) such dollar amount, multi4 plied by 

5 ‘‘(II) the cost-of-living adjust6 ment determined under section 1(f)(3) 

7 for the calendar year in which the tax8 able year begins, determined by sub9 stituting ‘calendar year 2020’ for ‘cal10 endar year 2016’ in subparagraph 

11 (A)(ii) thereof. 

12 ‘‘(ii) ROUNDING.—If any increase de13 termined under clause (i) is not a multiple 

14 of $10, such increase shall be rounded to 

15 the nearest multiple of $10. 

16 ‘‘(3) ELIGIBLE RETIREMENT PLAN.—For pur17 poses of this subsection, the term ‘eligible retirement 

18 plan’ means any plan which— 

19 ‘‘(A) is described in clause (i), (ii), (iv), 

20 (v), or (vi) of subsection (c)(8)(B), or 

21 ‘‘(B) is a defined contribution plan de22 scribed in clause (iii) of subsection (c)(8)(B). 

23 ‘‘(4) DISTRIBUTIONS MUST OTHERWISE BE IN24 CLUDIBLE.—Rules similar to the rules of subsection 

25 (l)(3) shall apply for purposes of this subsection. 


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1 ‘‘(5) SEPARATELY STATED PORTIONS OF A CON2 TRACT.—For purposes of this subsection, the 

3 amount taken into account as paid during the tax4 able year for coverage described in paragraph 

5 (1)(B)(i) includes premiums paid and charges as6 sessed during such taxable year for any such cov7 erage which is treated as a separate contract under 

8 section 7702B(e)(1), if such separate contract is a 

9 qualified long-term care insurance contract (as de10 fined in section 7702B(b)). 

11 ‘‘(6) COORDINATION WITH OTHER DEDUC12 TIONS.—The amounts excluded from gross income 

13 under paragraph (1) shall not be taken into account 

14 under section 162(l) or 213.’’. 

15 (b) AMOUNTS TREATED AS REQUIRED MINIMUM

16 DISTRIBUTION.—Section 401(a)(9) of the Internal Rev17 enue Code of 1986 is amended by adding at the end the 

18 following new subparagraph: 

19 ‘‘(J) TREATMENT OF DISTRIBUTIONS FOR

20 LONG-TERM CARE INSURANCE.—For purposes 

21 of this title, if a distribution is required under 

22 this paragraph for a taxable year, any distribu23 tion which is excluded from gross income under 

24 section 402(m) for the taxable year shall be 


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1 treated as a distribution required under this 

2 paragraph.’’. 

3 (c) CONFORMING AMENDMENTS.— 

4 (1) Section 401(k)(2)(B)(i) of the Internal Rev5 enue Code of 1986 is amended by striking ‘‘or’’ at 

6 the end of subclause (V), by adding ‘‘or’’ at the end 

7 of subclause (VI), and by adding at the end the fol8 lowing new subclause: 

9 ‘‘(VII) as provided in section 

10 402(m),’’. 

11 (2) Section 403(b)(11) of such Code is amend12 ed by striking ‘‘or’’ at the end of subparagraph (C), 

13 by striking the period at the end of subparagraph 

14 (D) and inserting ‘‘, or’’, and by inserting after sub15 paragraph (D) the following new subparagraph: 

16 ‘‘(E) for distributions to which section 

17 402(m) applies.’’. 

18 (3) Section 457(d)(1)(A) of such Code is 

19 amended by striking ‘‘or’’ at the end of clause (iii), 

20 by striking the comma at the end of clause (iv) and 

21 inserting ‘‘, or’’, and by adding at the end the fol22 lowing new clause: 

23 ‘‘(v) as provided in section 402(m),’’. 

24 (d) REPORTING.— 


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1 (1) IN GENERAL.—Subpart B of part III of 

2 subchapter A of chapter 61 of the Internal Revenue 

3 Code of 1986 is amended by adding at the end the 

4 following new section: 

5 ‘‘SEC. 6050Z. CERTAIN WITHDRAWALS FROM QUALIFIED AR6 RANGEMENTS FOR LONG-TERM CARE INSUR7 ANCE. 

8 ‘‘(a) REQUIREMENT OF REPORTING.—Any issuer of 

9 a qualified long-term care insurance contract (as defined 

10 in section 7702B(b)), including a rider or other provision 

11 that is treated as a qualified long-term care insurance con12 tract under section 7702B(e)(1), or of coverage described 

13 in section 402(m)(1)(B)(ii), shall make a return, accord14 ing to forms or regulations prescribed by the Secretary, 

15 setting forth for each insured individual— 

16 ‘‘(1) the aggregate amount of premiums and 

17 charges paid for the contract or coverage covering 

18 such individual during the calendar year, 

19 ‘‘(2) the name, address, and TIN of the owner 

20 of the contract, if applicable, and 

21 ‘‘(3) the name, address, and TIN of the insured 

22 under the contract. 

23 ‘‘(b) STATEMENT TO BE FURNISHED TO PERSONS

24 WITH RESPECT TO WHOM INFORMATION IS REQUIRED.— 

25 Every person required to make a return under subsection 


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1 (a) shall furnish to each individual whose name is required 

2 to be set forth in such return a written statement show3 ing— 

4 ‘‘(1) the name, address, and phone number of 

5 the information contact of the issuer of the qualified 

6 long-term care insurance contract or coverage de7 scribed in section 402(m)(1)(B)(ii), and 

8 ‘‘(2) the aggregate amount of premiums and 

9 charges paid under the contract or coverage covering 

10 the insured individual during the calendar year. 

11 The written statement required under the preceding sen12 tence shall be furnished to the individual or individuals 

13 on or before January 31 of the year following the calendar 

14 year for which the return required under subsection (a) 

15 was required to be made. 

16 ‘‘(c) CONTRACTS OR COVERAGE COVERING MORE

17 THAN ONE INSURED.—In the case of contracts or cov18 erage covering more than one insured, the return and 

19 statement required by subsections (a) and (b) shall iden20 tify only the portion of the premium that is properly allo21 cable to the insured in respect of whom the return or 

22 statement is made.’’. 

23 (2) CLERICAL AMENDMENT.—The table of sec24 tions for subpart B of part III of subchapter A of 

25 chapter 61 of such Code is amended by adding after 


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1 the item relating to section 6050Y the following new 

2 item: 

‘‘Sec. 6050Z. Certain withdrawals from qualified arrangements for long-term 

care insurance.’’. 

3 (e) EFFECTIVE DATE.—The amendment made by 

4 this section shall apply to distributions received after the 

5 date of the enactment of this Act. 

6 SEC. 3. INFORMATION ABOUT LONG-TERM CARE INSUR7 ANCE. 

8 Section 516 of the Employee Retirement Income Se9 curity Act of 1974 (29 U.S.C. 1146) is amended— 

10 (1) in the section heading, by inserting ‘‘AND

11 PARTICIPATION IN LONG-TERM CARE INSUR12 ANCE’’ after ‘‘SAVINGS’’; 

13 (2) in subsection (a), by inserting ‘‘and long14 term care insurance’’ after ‘‘income savings’’; 

15 (3) in subsection (c)— 

16 (A) in paragraph (1), by striking ‘‘; and’’ 

17 and inserting a semicolon; 

18 (B) in paragraph (2), by striking the pe19 riod and inserting ‘‘; and’’; and 

20 (C) by adding at the end the following: 

21 ‘‘(3) a description of long-term care insurance 

22 arrangements, and information regarding matters 

23 relevant to enrolling in such insurance, including— 


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1 ‘‘(A) a fact sheet for employers, in an eas2 ily accessible format; and 

3 ‘‘(B) a fact sheet for workers, in an easily 

4 accessible format.’’; and 

5 (4) in subsection (d)— 

6 (A) in the matter preceding paragraph (1), 

7 by inserting ‘‘and long-term care insurance’’ be8 fore the period at the end of the first sentence; 

9 (B) in paragraph (3), by adding ‘‘and’’ 

10 after the semicolon; 

11 (C) in paragraph (4), by striking ‘‘; and’’ 

12 and inserting a period; 

13 (D) by redesignating paragraphs (1) 

14 through (4) as subparagraphs (A) through (D), 

15 respectively, and adjusting the margins accord16 ingly; 

17 (E) by redesignating paragraph (5) as 

18 paragraph (3); 

19 (F) by inserting before subparagraph (A), 

20 as so redesignated, the following: 

21 ‘‘(1) With respect to retirement income sav22 ings—’’; 

23 (G) by inserting before paragraph (3), as 

24 so redesignated by subparagraph (E), the fol25 lowing: 


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1 ‘‘(2) With respect to long-term care insur2 ance— 

3 ‘‘(A) a description in simple terms of the 

4 common types of long-term care insurance 

5 available to both individuals and employers 

6 (specifically including small employers), includ7 ing information on the tax benefits of such in8 surance under the Internal Revenue Code of 

9 1986; and 

10 ‘‘(B) materials explaining to employers in 

11 simple terms, the characteristics and operation 

12 of the different long-term care insurance for 

13 their workers and what the basic legal require14 ments are under this Act and the Internal Rev15 enue Code of 1986, including the steps to enroll 

16 in such insurance and including links to the 

17 fact sheets described in subsection (c)(3).’’; and 

18 (H) in paragraph (3), as so redesignated 

19 by subparagraph (E)— 

20 (i) by striking ‘‘links to other’’ and in21 serting ‘‘Links to other’’; and 

22 (ii) by inserting ‘‘and long-term care 

23 insurance’’ after ‘‘retirement income sav24 ings arrangements’’. 

Æ 


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