I 
116TH CONGRESS 
2D SESSION 
H. R. 5958 
To amend the Internal Revenue Code of 1986 to create senior health planning 
accounts funded by the proceeds of the sale or assignment of life insur-
ance contracts. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 25, 2020 
Mr. HIGGINS of New York (for himself and Mr. STEUBE) 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 create 
senior health planning accounts funded by the proceeds 
of the sale or assignment of life insurance contracts. 
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 ‘‘Senior Health Plan-
ning Account Act’’. 
SEC. 2. SENIOR HEALTH PLANNING ACCOUNT. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 is amended 
by inserting after section 139G the following new section: 
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‘‘SEC. 139H. SENIOR HEALTH PLANNING ACCOUNT. 
‘‘(a) EXCLUSION OF CONTRIBUTIONS OF GAIN FROM 
SALES OF LIFE INSURANCE CONTRACTS.—The amount of 
gain from the sale or assignment of a life insurance con-
tract of a taxpayer shall be reduced (but not below zero) 
by the amount of contributions to a senior health planning 
account made by such taxpayer during the 30-day period 
beginning on the date of such sale or assignment. 
‘‘(b) TAX TREATMENT OF SENIOR HEALTH PLAN-
NING ACCOUNT.— 
‘‘(1) IN GENERAL.—A senior health planning 
account is exempt from taxation under this subtitle 
unless such account has ceased to be a senior health 
planning account. Notwithstanding the preceding 
sentence, any such account is subject to the taxes 
imposed by section 511 (relating to imposition of tax 
on unrelated business income of charitable, etc. or-
ganizations). 
‘‘(2) ACCOUNT TERMINATIONS.—Rules similar 
to the rules of paragraphs (2) and (4) of section 
408(e) shall apply to senior health planning ac-
counts, and any amount treated as distributed under 
such rules shall be treated as not used to pay quali-
fied health care expenses. 
‘‘(3) TAX TREATMENT OF DISTRIBUTIONS.— 
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‘‘(A) AMOUNTS
USED
FOR
QUALIFIED 
HEALTH CARE EXPENSES.—Any amount paid 
or distributed out of a senior health planning 
account which is used exclusively to pay quali-
fied health care expenses of the account bene-
ficiary or the account beneficiary’s spouse shall 
not be includible in gross income. 
‘‘(B) INCLUSION OF AMOUNTS NOT USED 
FOR
QUALIFIED
HEALTH
CARE
EXPENSES.— 
Any amount paid or distributed out of a senior 
health planning account which is not used to 
pay the qualified health care expenses of the ac-
count beneficiary or the account beneficiary’s 
spouse shall be included in the gross income of 
such beneficiary. 
‘‘(C) ADDITIONAL TAX ON DISTRIBUTIONS 
NOT USED FOR QUALIFIED HEALTH CARE EX-
PENSES.—The tax imposed by this chapter on 
the account beneficiary for any taxable year in 
which there is a payment or distribution from 
a senior health planning account of such bene-
ficiary which is includible in gross income under 
subparagraph (B) shall be increased by 20 per-
cent of the amount which is so includible. This 
subparagraph shall not apply if the payment or 
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distribution is made after the account bene-
ficiary— 
‘‘(i) dies, 
‘‘(ii) becomes a terminally ill indi-
vidual (as such term is defined in section 
101(g)(4)(A)), or 
‘‘(iii) becomes a chronically ill indi-
vidual (as such term is defined in section 
101(g)(4)(B)). 
‘‘(4) COORDINATION WITH MEDICAL EXPENSE 
DEDUCTION.—For purposes of determining the 
amount of the deduction under section 213, any pay-
ment or distribution out of a senior health planning 
account for qualified health care expenses shall not 
be treated as an expense paid for medical care. 
‘‘(5) TRANSFER OF ACCOUNT INCIDENT TO DI-
VORCE.—The transfer of an individual’s interest in 
a senior health planning account to an individual’s 
spouse or former spouse under a divorce or separa-
tion instrument described in subparagraph (A) of 
section 71(b)(2) shall not be considered a taxable 
transfer made by such individual notwithstanding 
any other provision of this subtitle, and such interest 
shall, after such transfer, be treated as a senior 
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health planning account with respect to which such 
spouse is the account beneficiary. 
‘‘(6) TREATMENT AFTER DEATH OF ACCOUNT 
BENEFICIARY.— 
‘‘(A) TREATMENT IF DESIGNATED BENE-
FICIARY
IS
SPOUSE.—If the account bene-
ficiary’s surviving spouse acquires such bene-
ficiary’s interest in a senior health planning ac-
count by reason of being the designated bene-
ficiary of such account at the death of the ac-
count beneficiary, such senior health planning 
account shall be treated as if the spouse were 
the account beneficiary. 
‘‘(B) OTHER CASES.— 
‘‘(i) IN GENERAL.—If, by reason of 
the death of the account beneficiary, any 
person acquires the account beneficiary’s 
interest in a senior health planning ac-
count in a case to which subparagraph (A) 
does not apply— 
‘‘(I) such account shall cease to 
be a senior health planning account as 
of the date of death, and 
‘‘(II) an amount equal to the fair 
market value of the assets in such ac-
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count on such date shall be includible 
if such person is not the estate of 
such beneficiary, in such person’s 
gross income for the taxable year 
which includes such date, or if such 
person is the estate of such bene-
ficiary, in such beneficiary’s gross in-
come for the last taxable year of such 
beneficiary. 
‘‘(ii) SPECIAL RULES.— 
‘‘(I) REDUCTION
OF
INCLUSION 
FOR
PREDEATH
EXPENSES.—The 
amount includible in gross income 
under clause (i) by any person (other 
than the estate) shall be reduced by 
the amount of qualified health care 
expenses which were incurred by the 
decedent before the date of the dece-
dent’s death and paid by such person 
within 1 year after such date. 
‘‘(II) DEDUCTION
FOR
ESTATE 
TAXES.—An 
appropriate 
deduction 
shall be allowed under section 691(c) 
to any person (other than the dece-
dent or the decedent’s spouse) with 
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respect to amounts included in gross 
income under clause (i) by such per-
son. 
‘‘(c) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(1) ACCOUNT
BENEFICIARY.—The term ‘ac-
count beneficiary’ means, with respect to a senior 
health planning account, the individual on whose be-
half such account was established. 
‘‘(2) SENIOR HEALTH PLANNING ACCOUNT.— 
The term ‘senior health planning account’ means a 
trust created or organized in the United States as 
a senior health planning account, but only if the 
written governing instrument creating the trust 
meets the following requirements: 
‘‘(A) No contribution will be accepted un-
less it is in cash and in consideration of the sale 
or assignment of any portion of the death bene-
fits under a life insurance contract on the life 
of the account beneficiary. 
‘‘(B) The trustee is a bank (as defined in 
section 408(n)), an insurance company (as de-
fined in section 816), or another person who 
demonstrates to the satisfaction of the Sec-
retary that the manner in which such person 
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