HR 583 IH 
‘‘(B) 
EMPLOYER-SUBSIDIZED
COV-
ERAGE.—
‘‘(i) IN
GENERAL.—Such term shall 
not include any month for which such indi-
vidual is eligible to participate in any sub-
sidized health plan (within the meaning of 
section 162(l)(2)) maintained by any em-
ployer of the taxpayer or of the spouse of 
the taxpayer. 
‘‘(ii) PREMIUMS
TO
NONSUBSIDIZED 
PLANS.—If an employer of the taxpayer or 
the spouse of the taxpayer maintains a 
health plan which is not a subsidized 
health plan (as so defined) and which con-
stitutes qualified health insurance, em-
ployee contributions to the plan shall be 
treated as amounts paid for qualified 
health insurance. 
‘‘(C) CAFETERIA
PLAN
AND
FLEXIBLE 
SPENDING
ACCOUNT
BENEFICIARIES.—Such 
term shall not include any month during a tax-
able year if any amount is not includable in the 
gross income of the taxpayer for such year 
under section 106 with respect to—
HR 583 IH 
‘‘(i) a benefit chosen under a cafeteria 
plan (as defined in section 125(d)), or 
‘‘(ii) a benefit provided under a flexi-
ble spending or similar arrangement. 
‘‘(D) MEDICARE
AND
MEDICAID.—Such 
term shall not include any month with respect 
to an individual if, as of the first day of such 
month, such individual—
‘‘(i) is entitled to any benefits under 
title XVIII of the Social Security Act, or 
‘‘(ii) is a participant in the program 
under title XIX or XXI of such Act. 
‘‘(E) CERTAIN
OTHER
COVERAGE.—Such 
term shall not include any month during a tax-
able year with respect to an individual if, at any 
time during such year, any benefit is provided 
to such individual under—
‘‘(i) chapter 89 of title 5, United 
States Code, 
‘‘(ii) chapter 55 of title 10, United 
States Code, 
‘‘(iii) chapter 17 of title 38, United 
States Code, or 
‘‘(iv) any medical care program under 
the Indian Health Care Improvement Act.
HR 583 IH 
‘‘(F) PRISONERS.—Such term shall not in-
clude any month with respect to an individual 
if, as of the first day of such month, such indi-
vidual is imprisoned under Federal, State, or 
local authority. 
‘‘(G) INSUFFICIENT PRESENCE IN UNITED 
STATES.—Such term shall not include any 
month during a taxable year with respect to an 
individual if such individual is present in the 
United States on fewer than 183 days during 
such year (determined in accordance with sec-
tion 7701(b)(7)). 
‘‘(4) COORDINATION
WITH
DEDUCTION
FOR 
HEALTH INSURANCE COSTS OF SELF-EMPLOYED IN-
DIVIDUALS.—In the case of a taxpayer who is eligi-
ble to deduct any amount under section 162(l) for 
the taxable year, this section shall apply only if the 
taxpayer elects not to claim any amount as a deduc-
tion under such section for such year. 
‘‘(c) QUALIFIED HEALTH INSURANCE.—For pur-
poses of this section—
‘‘(1) IN GENERAL.—The term ‘qualified health 
insurance’ means insurance which constitutes med-
ical care as defined in section 213(d) without regard 
to—
HR 583 IH 
‘‘(A) paragraph (1)(C) thereof, and 
‘‘(B) so much of paragraph (1)(D) thereof 
as relates to qualified long-term care insurance 
contracts. 
‘‘(2) EXCLUSION
OF
CERTAIN
OTHER
CON-
TACTS.—Such term shall not include insurance if a 
substantial portion of its benefits are excepted bene-
fits (as defined in section 9832(c)). 
‘‘(d) 
MEDICAL
SAVINGS
ACCOUNT
CONTRIBU-
TIONS.—
‘‘(1) IN GENERAL.—If a deduction would (but 
for paragraph (2)) be allowed under section 220 to 
the taxpayer for a payment for the taxable year to 
the medical savings account of an individual, sub-
section (a) shall be applied by treating such payment 
as a payment for qualified health insurance for such 
individual. 
‘‘(2) DENIAL OF DOUBLE BENEFIT.—No deduc-
tion shall be allowed under section 220 for that por-
tion of the payments otherwise allowable as a deduc-
tion under section 220 for the taxable year which is 
equal to the amount of credit allowed for such tax-
able year by reason of this subsection. 
‘‘(e) SPECIAL RULES.—
HR 583 IH 
‘‘(1) COORDINATION WITH MEDICAL EXPENSE 
DEDUCTION.—The amount which would (but for this 
paragraph) be taken into account by the taxpayer 
under section 213 for the taxable year shall be re-
duced by the credit (if any) allowed by this section 
to the taxpayer for such year. 
‘‘(2) DENIAL OF CREDIT TO DEPENDENTS.—No 
credit shall be allowed under this section to any indi-
vidual with respect to whom a deduction under sec-
tion 151 is allowable to another taxpayer for a tax-
able year beginning in the calendar year in which 
such individual’s taxable year begins.
‘‘(3) INFLATION ADJUSTMENT.—In the case of 
any taxable year beginning in a calendar year after 
2004, each dollar amount contained in subsection 
(b)(2)(A) shall be increased by an amount equal 
to—
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which the taxable year begins, deter-
mined by substituting ‘calendar year 2003’ for 
‘calendar year 1992’ in subparagraph (B) 
thereof.