(C) COMPARABILITY EXCISE TAX.—Section 
4980G shall not apply to contributions made 
under this subsection. 
(5) TERMINATION.—This paragraph shall not 
apply to any taxable year beginning after December 
31, 2011. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2006. 
SEC. 8. CERTAIN EXPENSES TREATED AS QUALIFIED MED-
ICAL EXPENSES. 
(a) PREMIUMS FOR NON-GROUP HIGH DEDUCTIBLE 
HEALTH PLANS TREATED AS QUALIFIED MEDICAL EX-
PENSES.—Subparagraph (C) of section 223(d)(2) of the 
Internal Revenue Code of 1986 is amended by striking 
‘‘or’’ at the end of clause (iii), by striking the period at 
the end of clause (iv) and inserting ‘‘, or’’, and by adding 
at the end the following new clause: 
‘‘(v) in the case of any individual who 
meets the requirements of subsection 
(c)(1)(A)(ii) (after application of sub-
section (c)(1)(B)) and section 224(c)(2), a 
high deductible health plan.’’. 
(b) SPECIAL RULE
FOR CERTAIN MEDICAL EX-
PENSES INCURRED BEFORE ESTABLISHMENT
OF AC-
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COUNT.—Paragraph (2) of section 223(d) of such Code 
is amended by adding at the end the following new sub-
paragraph: 
‘‘(E) CERTAIN
MEDICAL
EXPENSES
IN-
CURRED BEFORE ESTABLISHMENT OF ACCOUNT 
TREATED AS QUALIFIED.—An expense shall not 
fail to be treated as a qualified medical expense 
solely because such expense was incurred before 
the establishment of the health savings account 
if such expense was incurred— 
‘‘(i) during either— 
‘‘(I) the taxable year in which the 
health savings account was estab-
lished, or 
‘‘(II) the preceding taxable year 
in the case of a health savings ac-
count established after the taxable 
year in which such expense was in-
curred but before the time prescribed 
by law for filing the return for such 
taxable year (not including extensions 
thereof), and 
‘‘(ii) for medical care of an individual 
during a period that such individual was 
covered by a high deductible health plan 
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and met the requirements of subsection 
(c)(1)(A)(ii) (after application of sub-
section (c)(1)(B)).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2006. 
SEC. 9. EXCEPTION TO REQUIREMENT FOR EMPLOYERS TO 
MAKE COMPARABLE HEALTH SAVINGS AC-
COUNT CONTRIBUTIONS. 
(a) IN GENERAL.—Section 4980G of the Internal 
Revenue Code of 1986 (relating to failure of employer to 
make comparable health savings account contributions) is 
amended by adding at the end the following new sub-
section: 
‘‘(d) EXCEPTION.— 
‘‘(1) IN GENERAL.—To the extent that an em-
ployer’s contributions to the health savings accounts 
of qualified employees exceed the employer’s com-
parable contributions to the health savings accounts 
of other employees, this section shall not apply with 
respect to the employer’s contributions to the health 
savings accounts of qualified employees. 
‘‘(2) QUALIFIED EMPLOYEE.—For purposes of 
this subsection, with respect to an employer, the 
term ‘qualified employee’ means an individual— 
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