167
or’’, and by inserting after paragraph (21)
the following new paragraph:
‘‘(22) any payment made to or for the benefit
of an employee if at the time of such payment it is
reasonable to believe that the employee will be able
to exclude such payment from income under section
106(b).’’
(ii) Subsection (a) of section 209 of
the Social Security Act is amended by
striking ‘‘or’’ at the end of paragraph (17),
by striking the period at the end of para-
graph (18) and inserting ‘‘; or’’, and by in-
serting after paragraph (18) the following
new paragraph:
‘‘(19) any payment made to or for the benefit
of an employee if at the time of such payment it is
reasonable to believe that the employee will be able
to exclude such payment from income under section
106(b) of the Internal Revenue Code of 1986.’’
(B) RAILROAD
RETIREMENT
TAX.—Sub-
section (e) of section 3231 is amended by add-
ing at the end the following new paragraph:
‘‘(10) MEDICAL SAVINGS ACCOUNT CONTRIBU-
TIONS.—The term ‘compensation’ shall not include
any payment made to or for the benefit of an em-
168
ployee if at the time of such payment it is reason-
able to believe that the employee will be able to ex-
clude such payment from income under section
106(b).’’
(C) UNEMPLOYMENT TAX.—Subsection (b)
of section 3306 is amended by striking ‘‘or’’ at
the end of paragraph (15), by striking the pe-
riod at the end of paragraph (16) and inserting
‘‘; or’’, and by inserting after paragraph (16)
the following new paragraph:
‘‘(17) any payment made to or for the benefit
of an employee if at the time of such payment it is
reasonable to believe that the employee will be able
to exclude such payment from income under section
106(b).’’
(D) WITHHOLDING
TAX.—Subsection (a)
of section 3401 is amended by striking ‘‘or’’ at
the end of paragraph (19), by striking the pe-
riod at the end of paragraph (20) and inserting
‘‘; or’’, and by inserting after paragraph (20)
the following new paragraph:
‘‘(21) any payment made to or for the benefit
of an employee if at the time of such payment it is
reasonable to believe that the employee will be able
169
to exclude such payment from income under section
106(b).’’
(d) MEDICAL SAVINGS ACCOUNT CONTRIBUTIONS
NOT AVAILABLE UNDER CAFETERIA PLANS.—Subsection
(f) of section 125 of such Code is amended by inserting
‘‘106(b),’’ before ‘‘117’’.
(e) EXCLUSION
OF MEDICAL SAVINGS ACCOUNTS
FROM ESTATE TAX.—Part IV of subchapter A of chapter
11 is amended by adding at the end the following new
section:
‘‘SEC. 2057. MEDICAL SAVINGS ACCOUNTS.
‘‘For purposes of the tax imposed by section 2001,
the value of the taxable estate shall be determined by de-
ducting from the value of the gross estate an amount
equal to the value of any medical savings account (as de-
fined in section 220(d)) included in the gross estate.’’
(f) TAX ON EXCESS CONTRIBUTIONS.—Section 4973
(relating to tax on excess contributions to individual re-
tirement accounts, certain section 403(b) contracts, and
certain individual retirement annuities) is amended—
(1) by inserting ‘‘MEDICAL
SAVINGS
AC-
COUNTS,’’ after ‘‘ACCOUNTS,’’ in the heading of
such section,
(2) by striking ‘‘or’’ at the end of paragraph
(1) of subsection (a),