(A) by striking ‘‘or any of his dependents’’ 
in the matter preceding subparagraph (A) and 
inserting ‘‘, any of his dependents, or any eligi-
ble beneficiary (within the meaning of section 
106(g)) with respect to the employee’’, 
(B) by striking ‘‘or any of his dependents,’’ 
in subparagraph (A) and inserting ‘‘, any of his 
dependents, or any eligible beneficiary (within 
the meaning of section 106(g)) with respect to 
the employee,’’, and 
(C) by striking ‘‘and their dependents’’ 
both places it appears and inserting ‘‘and such 
employees’ dependents and eligible beneficiaries 
(within the meaning of section 106(g))’’. 
(2) Section 3231(e)(1) of such Code is amend-
ed— 
(A) by striking ‘‘or any of his dependents’’ 
and inserting ‘‘, any of his dependents, or any 
eligible beneficiary (within the meaning of sec-
tion 106(g)) with respect to the employee,’’, 
and 
(B) by striking ‘‘and their dependents’’ 
both places it appears and inserting ‘‘and such 
employees’ dependents and eligible beneficiaries 
(within the meaning of section 106(g))’’. 
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(3) Section 3306(b)(2) of such Code is amend-
ed— 
(A) by striking ‘‘or any of his dependents’’ 
in the matter preceding subparagraph (A) and 
inserting ‘‘, any of his dependents, or any eligi-
ble beneficiary (within the meaning of section 
106(g)) with respect to the employee,’’, 
(B) by striking ‘‘or any of his dependents’’ 
in subparagraph (A) and inserting ‘‘, any of his 
dependents, or any eligible beneficiary (within 
the meaning of section 106(g)) with respect to 
the employee’’, and 
(C) by striking ‘‘and their dependents’’ 
both places it appears and inserting ‘‘and such 
employees’ dependents and eligible beneficiaries 
(within the meaning of section 106(g))’’. 
(4) Section 3401(a) of such Code is amended 
by striking ‘‘or’’ at the end of paragraph (22), by 
striking the period at the end of paragraph (23) and 
inserting ‘‘; or’’, and by inserting after paragraph 
(23) the following new paragraph: 
‘‘(24) for any payment made to or for the ben-
efit of an employee or any eligible beneficiary (within 
the meaning of section 106(g)) if at the time of such 
payment it is reasonable to believe that the employee 
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will be able to exclude such payment from income 
under section 106 or under section 105 by reference 
in section 105(b) to section 106(g).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2013. 
SEC. 3. EXPANSION OF DEPENDENCY FOR PURPOSES OF 
DEDUCTION FOR HEALTH INSURANCE COSTS 
OF SELF-EMPLOYED INDIVIDUALS. 
(a) IN GENERAL.—Paragraph (1) of section 162(l) 
of the Internal Revenue Code of 1986 is amended by strik-
ing ‘‘and’’ at the end of subparagraph (C), by striking the 
period at the end of subparagraph (D) and inserting a 
comma and by adding at the end the following new sub-
paragraphs: 
‘‘(E) any individual who— 
‘‘(i) satisfies the age requirements of 
section 152(c)(3)(A), 
‘‘(ii) bears a relationship to the tax-
payer described in section 152(d)(2)(H), 
and 
‘‘(iii) meets the requirements of sec-
tion 152(d)(1)(C), and 
‘‘(F) one individual who— 
‘‘(i) is at least age 19, 
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‘‘(ii) bears a relationship to the tax-
payer described in section 152(d)(2)(H), 
and 
‘‘(iii) is not the spouse of the taxpayer 
and does not bear any relationship to the 
taxpayer described in subparagraphs (A) 
through (G) of section 152(d)(2).’’. 
(b) CONFORMING AMENDMENT.—Subparagraph (B) 
of section 162(l)(2) of such Code is amended by inserting 
‘‘, (E), or (F)’’ after ‘‘subparagraph (D)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2013. 
SEC. 4. EXTENSION TO ELIGIBLE BENEFICIARIES OF SICK 
AND 
ACCIDENT 
BENEFITS 
PROVIDED 
TO 
MEMBERS OF A VOLUNTARY EMPLOYEES’ 
BENEFICIARY ASSOCIATION AND THEIR DE-
PENDENTS. 
(a) IN GENERAL.—Section 501(c)(9) of the Internal 
Revenue Code of 1986 is amended by inserting : ‘‘and any 
individual who is an eligible beneficiary (within the mean-
ing of section 106(g)), as determined under the terms of 
a medical benefit, health insurance, or other program’’ 
after ‘‘age 27’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2013. 
SEC. 5. FLEXIBLE SPENDING ARRANGEMENTS AND HEALTH 
REIMBURSEMENT ARRANGEMENTS. 
The Secretary of Treasury shall issue guidance of 
general applicability within 180 days after the date of the 
enactment of this Act providing that medical expenses that 
otherwise qualify— 
(1) for reimbursement from a flexible spending 
arrangement under regulations in effect on such 
date of enactment may be reimbursed from an em-
ployee’s flexible spending arrangement, notwith-
standing the fact that such expenses are attributable 
to any individual who is not the employee’s spouse 
or dependent (within the meaning of section 105(b) 
of the Internal Revenue Code of 1986) but is an eli-
gible beneficiary (within the meaning of section 
106(g) of such Code) under the flexible spending ar-
rangement with respect to the employee, and 
(2) for reimbursement from a health reimburse-
ment arrangement under regulations in effect on 
such date of enactment may be reimbursed from an 
employee’s health reimbursement arrangement, not-
withstanding the fact that such expenses are attrib-
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utable to an individual who is not a spouse or de-
pendent (within the meaning of section 105(b) of 
such Code) but is an eligible beneficiary (within the 
meaning of section 106(g) of such Code) under the 
health reimbursement arrangement with respect to 
the employee. 
SEC. 6. EXTENSION OF QUALIFIED MEDICAL EXPENSES 
FROM HEALTH SAVINGS ACCOUNTS. 
(a) IN GENERAL.—Subparagraph (A) of section 
223(d)(2) of the Internal Revenue Code of 1986 is amend-
ed— 
(1) by striking ‘‘and any dependent’’ and in-
serting ‘‘any dependent’’, and 
(2) by inserting ‘‘, and any qualified bene-
ficiary’’ after ‘‘thereof)’’. 
(b) QUALIFIED BENEFICIARY.—Paragraph (2) of 
section 223(d) of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subpara-
graph: 
‘‘(D) QUALIFIED BENEFICIARY.—For pur-
poses of subparagraph (A), the term ‘qualified 
beneficiary’ means any individual who is de-
scribed in subparagraph (D) or (E) of section 
162(l)(1).’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2013. 
SEC. 7. EXTENSION OF FUNDING MECHANISM FOR MED-
ICAL BENEFITS FOR RETIREES AND THEIR 
FAMILIES. 
(a) IN GENERAL.—Section 401(h) of the Internal 
Revenue Code of 1986 is amended by inserting ‘‘, and any 
eligible beneficiary (within the meaning of section 106(g)) 
of the retired employee’’ after ‘‘age 27’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2013. 
Æ 
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