I 
108TH CONGRESS 
1ST SESSION H. R. 1287
To amend the Internal Revenue Code of 1986 to make health care coverage 
more accessible and affordable. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 13, 2003
Mr. PAUL 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 make 
health care coverage more accessible and affordable.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Comprehensive Health 
Care Reform Act of 2003’’. 
SEC. 2. REFUNDABLE CREDIT FOR HEALTH CARE COSTS. 
(a) IN GENERAL.—Section 35 of the Internal Rev-
enue Code of 1986 (relating to health insurance costs of 
eligible individuals) is amended to read as follows:
‘‘SEC. 35. HEALTH INSURANCE COSTS. 
‘‘(a) IN GENERAL.—In the case of an individual, 
there shall be allowed as a credit against the tax imposed 
by subtitle A an amount equal to the amount paid by the 
taxpayer for insurance which constitutes medical care for 
the taxpayer and the taxpayer’s spouse and dependents. 
‘‘(b) LIMITATION.—The credit allowed by subsection 
(a) for the taxable year shall not exceed the sum of—
‘‘(1) the taxpayer’s net income tax for the tax-
able year, and 
‘‘(2) the taxpayer’s social security taxes (as de-
fined in section 24(d)) for such taxable year. 
For purposes of paragraph (1), the term ‘net income tax’ 
means the sum of the regular tax liability and the tax im-
posed by section 55, reduced by the credits allowable 
under this part (other than this subpart). 
‘‘(c) DENIAL OF DOUBLE BENEFIT.—Any amount 
allowed as a credit under this section shall not be taken 
into account in determining the amount of any deduction 
under this chapter.’’
(b) CONFORMING AMENDMENTS.—
(1) Section 162(l) of such Code is hereby re-
pealed. 
(2) Section 202 of the Trade Act of 2002, and 
the amendments made by such section, is hereby re-
pealed, and the Internal Revenue Code of 1986 shall 
be applied as if such section had not been enacted. 
(3) The item relating to section 35 in the table 
of sections for subpart C of part IV of subchapter 
A of chapter 1 of such Code is amended to read as 
follows:
‘‘Sec. 35. Health insurance costs.’’
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2003. 
SEC. 3. DISPOSITION OF UNUSED HEALTH BENEFITS IN 
CAFETERIA PLANS AND FLEXIBLE SPENDING 
ARRANGEMENTS. 
(a) IN GENERAL.—Section 125 of the Internal Rev-
enue Code of 1986 (relating to cafeteria plans) is amended 
by redesignating subsections (h) and (i) as subsections (i) 
and (j), respectively, and by inserting after subsection (g) 
the following: 
‘‘(h) CARRYFORWARDS OR PAYMENTS OF CERTAIN 
UNUSED HEALTH BENEFITS.—
‘‘(1) IN GENERAL.—For purposes of this title, 
a plan or other arrangement shall not fail to be 
treated as a cafeteria plan solely because qualified 
benefits under such plan include a health flexible 
spending arrangement under which not more than 
$500 of unused health benefits may be—
‘‘(A) carried forward to the succeeding 
plan year of such health flexible spending ar-
rangement, or 
‘‘(B) paid to or on behalf of an employee 
as compensation as of the end of such plan year 
or upon the termination of, or failure to re-en-
roll in, such plan or arrangement. 
‘‘(2) DISTRIBUTION OF UNUSED HEALTH BENE-
FITS ON BEHALF OF EMPLOYEE.—For purposes of 
paragraph (1)(B), unused health benefits paid as 
compensation on behalf of an employee by the em-
ployer shall be—
‘‘(A) includible in gross income and wages 
of the employee, whether or not a deduction for 
such payment is allowable under this title to the 
employee, and 
‘‘(B) excludable from—
‘‘(i) gross income to the extent pro-
vided under section 402(e), 457(a) (with 
respect to contributions to an eligible de-
ferred compensation plan (as defined in 
section 457(b)) of an eligible employer de-
scribed in section 457(e)(1)(A)), or 220, 
and
‘‘(ii) wages to the extent otherwise 
provided for amounts so excludable. 
‘‘(3) HEALTH FLEXIBLE SPENDING ARRANGE-
MENT.—For purposes of this subsection, the term 
‘health flexible spending arrangement’ means a flexi-
ble spending arrangement (as defined in section 
106(c)) that is a qualified benefit and only permits 
reimbursement for expenses for medical care (as de-
fined in section 213(d)(1) (without regard to sub-
paragraphs (C) and (D) thereof). 
‘‘(4) UNUSED
HEALTH
BENEFITS.—For pur-
poses of this subsection, the term ‘unused health 
benefits’ means the excess of—
‘‘(A) the maximum amount of reimburse-
ment allowable during a plan year under a 
health flexible spending arrangement, over 
‘‘(B) the actual amount of reimbursement 
during such year under such arrangement.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to taxable years beginning after 
December 31, 2003.
SEC. 4. EXPANSION OF AVAILABILITY OF ARCHER MEDICAL 
SAVINGS ACCOUNTS. 
(a) REPEAL OF DOLLAR LIMITATIONS ON AMOUNT 
THAT MAY BE CONTRIBUTED TO ARCHER MSA.—