‘‘(A) IN GENERAL.—No deduction shall be 
allowed for an individual under subsection (a) 
for any amount paid for coverage under a high 
deductible health plan for a month if that indi-
vidual participates in any coverage under a 
group health plan (within the meaning of sec-
tion 5000 without regard to section 5000(d)). 
For purposes of the preceding sentence, an ar-
rangement which constitutes individual health 
insurance shall not be treated as a group health 
plan if such arrangement is a high deductible 
health plan (as defined in section 223(c)(2)), or 
is a payment by an employer or employee orga-
nization with respect to such high deductible 
health plan, notwithstanding that an employer 
or employee organization negotiates the cost or 
benefits of such arrangement. 
‘‘(B) EXCEPTION FOR PLANS ONLY PRO-
VIDING
CONTRIBUTIONS
TO
HEALTH
SAVINGS 
ACCOUNTS.—Subparagraph (A) shall not apply 
to an individual if the individual’s only coverage 
under a group health plan for a month consists 
of contributions by an employer to a health sav-
ings account with respect to which the indi-
vidual is the account beneficiary. 
VerDate Aug 31 2005 
22:50 Sep 18, 2006
Jkt 049200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H6065.IH
H6065
jlentini on PROD1PC65 with BILLS
‘‘(C) EXCEPTION
FOR
CERTAIN
PER-
MITTED
COVERAGE.—Subparagraph (A) shall 
not apply to an individual if the individual’s 
only coverage under a group health plan for a 
month is coverage described in clause (i) or (ii) 
of section 223(c)(1)(B). 
‘‘(3) MEDICAL
AND
HEALTH
SAVINGS
AC-
COUNTS.—Subsection (a) shall not apply with re-
spect to any amount which is paid or distributed out 
of an Archer MSA or a health savings account which 
is not included in gross income under section 220(f) 
or 223(f), as the case may be. 
‘‘(4) COORDINATION
WITH
DEDUCTION
FOR 
HEALTH INSURANCE OF SELF-EMPLOYED INDIVID-
UALS.—Any amount taken into account by the tax-
payer in computing the deduction under section 
162(l) shall not be taken into account under this 
section. 
‘‘(5) COORDINATION WITH MEDICAL EXPENSE 
DEDUCTION.—Any amount taken into account by 
the taxpayer in computing the deduction under this 
section shall not be taken into account under section 
213.’’. 
(b) DEDUCTION ALLOWED WHETHER OR NOT INDI-
VIDUAL ITEMIZES OTHER DEDUCTIONS.—Subsection (a) 
VerDate Aug 31 2005 
22:50 Sep 18, 2006
Jkt 049200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H6065.IH
H6065
jlentini on PROD1PC65 with BILLS
of section 62 of such Code is amended by inserting before 
the last sentence at the end the following new paragraph: 
‘‘(21) PREMIUMS
FOR
HIGH
DEDUCTIBLE 
HEALTH PLANS.—The deduction allowed by section 
224.’’. 
(c) COORDINATION WITH SECTION 35 HEALTH IN-
SURANCE COSTS CREDIT.—Section 35(g)(2) of such Code 
is amended by striking ‘‘or 213’’ and inserting ‘‘, 213, 
or 224’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for part VII of subchapter B of chapter 1 of such Code 
is amended by redesignating the item relating to section 
224 as an item relating to section 225 and by inserting 
before such item the following new item: 
‘‘Sec. 224. Premiums for high deductible health plans.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2006. 
SEC. 3. CREDIT FOR CERTAIN EMPLOYMENT TAXES PAID 
WITH RESPECT TO PREMIUMS FOR HIGH DE-
DUCTIBLE HEALTH PLANS AND CONTRIBU-
TIONS TO HEALTH SAVINGS ACCOUNTS. 
(a) ALLOWANCE OF CREDIT.—Subpart C of part IV 
of subchapter A of chapter 1 of the Internal Revenue Code 
of 1986 (relating to refundable credits) is amended by re-
VerDate Aug 31 2005 
22:50 Sep 18, 2006
Jkt 049200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H6065.IH
H6065
jlentini on PROD1PC65 with BILLS
designating section 36 as section 37 and by inserting after 
section 35 the following new section: 
‘‘SEC. 36. EMPLOYMENT TAXES PAID WITH RESPECT TO 
PREMIUMS FOR HIGH DEDUCTIBLE HEALTH 
PLANS AND CONTRIBUTIONS TO HEALTH 
SAVINGS ACCOUNTS. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax 
imposed by this subtitle for the taxable year an amount 
equal to the product of— 
‘‘(1) the sum of the rates of tax in effect under 
sections 3101(a), 3101(b), 3111(a), and 3111(b) for 
the calendar year in which the taxable year begins, 
multiplied by 
‘‘(2) the sum of— 
‘‘(A) the aggregate amount paid by such 
individual as premiums under a high deductible 
health plan which is allowed as a deduction 
under section 224 for the taxable year, and 
‘‘(B) the aggregate amount paid to a 
health savings account of such individual which 
is allowed as a deduction under section 223 for 
the taxable year. 
‘‘(b) CREDIT LIMITED TO CERTAIN EMPLOYMENT 
TAXES.— 
VerDate Aug 31 2005 
22:50 Sep 18, 2006
Jkt 049200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H6065.IH
H6065
jlentini on PROD1PC65 with BILLS