I 
111TH CONGRESS 
1ST SESSION H. R. 1495 
To amend the Internal Revenue Code of 1986 to make health care coverage 
more accessible and affordable. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 12, 2009 
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 2009’’. 
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: 
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‘‘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 this subtitle an amount equal to the sum of— 
‘‘(1) the amount paid by the taxpayer for insur-
ance which constitutes medical care for the taxpayer 
and the taxpayer’s spouse and dependents, plus 
‘‘(2) the amount contributed to a health savings 
account of the individual (or the individual’s 
spouse). 
‘‘(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, plus 
‘‘(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 plus the tax 
imposed by section 55, reduced by the credits allowable 
under this part (other than this subpart). 
‘‘(c) DENIAL OF DOUBLE BENEFIT.— 
‘‘(1) IN GENERAL.—Any amount allowed as a 
credit under this section shall not be taken into ac-
count in determining the amount of any deduction 
under this chapter. 
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‘‘(2) COORDINATION
WITH
HEALTH
SAVINGS 
ACCOUNT CONTRIBUTIONS.—For purposes of para-
graph (1), amounts taken into account under sub-
section (a) for a taxable year shall be treated as 
being attributable to amounts paid for insurance to 
the extent of such payments.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 223(b) of such Code, as amended by 
section 4, is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(4) 
COORDINATION
WITH
CREDIT
FOR 
HEALTH
INSURANCE.—The limitation under para-
graph (1) shall be reduced by the amount treated as 
being taken into account under section 35(a)(2).’’. 
(2) Section 223(e)(3)(B) of such Code, as 
amended by section 4, is amended by inserting ‘‘nor 
treated as being taken into account under section 
35(a)(2)’’ before the period at the end. 
(3) Section 4973(g) of such Code is amended— 
(A) in paragraph (1) by inserting ‘‘or a 
credit under section 35’’ after ‘‘section 223’’, 
and 
(B) in paragraph (2)(B)(i) by striking 
‘‘maximum’’ and inserting ‘‘sum of the amount 
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treated as being taken into account under sec-
tion 35(a)(2) plus the’’. 
(4) Section 162 of such Code is amended by 
striking subsection (l). 
(5) Chapter 77 of such Code is amended by 
striking section 7527 and by striking the item relat-
ing to section 7527 in the table of sections for such 
chapter. 
(6) Subpart B of part III of subchapter A of 
chapter 61 of such Code is amended by striking sec-
tion 6050T and by striking the item relating to sec-
tion 6050T in the table of sections for such chapter. 
(7) Section 6103(l) of such Code is amended by 
striking paragraph (18). 
(8) Section 6103(p) of such Code is amended— 
(A) in paragraph (3)(A) by striking ‘‘(17), 
or (18)’’ and inserting ‘‘or (17)’’, and 
(B) in paragraph (4) by striking ‘‘or (18)’’ 
after ‘‘any other person described in subsection 
(l)(10), (16)’’ each place it appears. 
(9) Section 7213A(a)(1)(B) of such Code is 
amended by striking ‘‘subsection (l)(18) or (n) of 
section 6103’’ and inserting ‘‘section 6103(n)’’. 
(10) Section 6724(d)(1)(B) of such Code is 
amended by striking clause (xiii). 
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(11) Section 6724(d)(2) of such Code is amend-
ed by striking subparagraph (DD). 
(12) 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, 2009. 
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 (i) and (j) as subsections (j) 
and (k), respectively, and by inserting after subsection (h) 
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— 
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‘‘(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 
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‘‘(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, 2009. 
SEC. 4. STRENGTHENING HEALTH SAVINGS ACCOUNTS. 
(a) REPEAL
OF
REQUIREMENT
FOR
COVERAGE 
UNDER HIGH DEDUCTIBLE HEALTH PLAN.— 
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(1) IN GENERAL.—Section 223 of the Internal 
Revenue Code of 1986 (relating to health savings ac-
counts) is amended by striking subsections (a), (b), 
and (c) and inserting the following: 
‘‘(a) DEDUCTION ALLOWED.—In the case of an indi-
vidual, there shall be allowed as a deduction for the tax-
able year an amount equal to the aggregate amount paid 
in cash during such taxable year by or on behalf of such 
individual to a health savings account of such individual. 
‘‘(b) LIMITATIONS.— 
‘‘(1) IN GENERAL.—The amount allowable as a 
deduction to a taxpayer under subsection (a) for the 
taxable year shall not exceed $8,000 ($16,000 in the 
case of a joint return). 
‘‘(2) COORDINATION WITH OTHER CONTRIBU-
TIONS.—The limitation which would (but for this 
paragraph) apply under this subsection to a tax-
payer for any taxable year shall be reduced (but not 
below zero) by the sum of— 
‘‘(A) the aggregate amount paid for such 
taxable year to Archer MSAs of the taxpayer, 
and 
‘‘(B) the aggregate amount contributed to 
health savings accounts of the taxpayer which is 
excludable from the taxpayer’s gross income for 
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such taxable year under section 106(d) (and 
such amount shall not be allowed as a deduc-
tion under subsection (a)). 
‘‘(3) DENIAL
OF
DEDUCTION
TO
DEPEND-
ENTS.—No deduction shall be allowed under this 
section to any individual with respect to whom a de-
duction under section 151 is allowable to another 
taxpayer for a taxable year beginning in the cal-
endar year in which such individual’s taxable year 
begins.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 223 of such Code is amended 
by redesignating subsections (d), (e), (f), (g), 
and (h) as subsections (c), (d), (e), (f), and (g), 
respectively. 
(B) Section 223(f) of such Code (as redes-
ignated by subparagraph (A)) is amended to 
read as follows: 
‘‘(f) COST-OF-LIVING ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of any taxable 
year beginning in a calendar year after 2010, each 
dollar amount in subsection (b)(1) shall be increased 
by an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
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‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which such taxable year begins, deter-
mined by substituting ‘calendar year 2009’ for 
‘calendar year 1992’ in subparagraph (B) 
thereof. 
‘‘(2) ROUNDING.—If any increase under para-
graph (1) is not a multiple of $50, such increase 
shall be rounded to the nearest multiple of $50.’’. 
(C) Section 26(b)(2)(S) of such Code is 
amended by striking ‘‘section 223(f)(4)’’ and 
inserting ‘‘section 223(e)(4)’’. 
(D) Each of the following sections of such 
Code is amended by striking ‘‘section 223(d)’’ 
and inserting ‘‘section 223(c)’’: 
(i) Section 35(g)(3). 
(ii) Section 106(d)(1). 
(iii) Section 220(f)(5)(A). 
(iv) Section 848(e)(1)(B)(v). 
(v) Section 4973(a)(5). 
(vi) Section 4973(g). 
(vii) Section 4975(c)(6). 
(viii) Section 4975(e)(1)(E). 
(ix) Section 6051(a)(12). 
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(E) Section 4973(g) of such Code is 
amended— 
(i) in paragraph (1) by striking ‘‘sec-
tion 223(f)(5)’’ and inserting ‘‘section 
223(e)(5)’’, 
(ii) in paragraph (2)(A) by striking 
‘‘section 223(f)(2)’’ and inserting ‘‘section 
223(e)(2)’’, and 
(iii) in the matter following paragraph 
(2) by striking ‘‘section 223(f)(3)’’ and in-
serting ‘‘section 223(e)(3)’’. 
(F) Section 4975(c)(6) of such Code is 
amended by striking ‘‘section 223(e)(2)’’ and 
inserting ‘‘section 223(d)(2)’’. 
(G) Section 6693(a)(2)(C) of such Code is 
amended by striking ‘‘section 223(h)’’ and in-
serting ‘‘section 223(g)’’. 
(b) DEDUCTION ALLOWED FOR PREMIUM PAYMENTS 
FOR HIGH DEDUCTIBLE POLICIES.—Section 223(c)(2)(C) 
of such Code (as amended by subsection (a)) 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 inserting after clause (iv) the following new clause: 
‘‘(v) a high deductible health plan.’’. 
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(c) 
PURCHASE
OF
MEDIGAP
POLICIES
PER-
MITTED.—Clause (iv) of section 223(c)(2)(C) of such 
Code (as amended by this section) is amended by striking 
‘‘other than’’ and inserting ‘‘, including’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2009. 
SEC. 5. REPEAL OF 7.5 PERCENT THRESHOLD ON DEDUC-
TION FOR MEDICAL EXPENSES. 
(a) IN GENERAL.—Subsection (a) of section 213 of 
the Internal Revenue Code of 1986 (relating to deduction 
for medical expenses) is amended by striking ‘‘to the ex-
tent that such expenses exceed 7.5 percent of adjusted 
gross income’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2009. 
Æ 
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