Title: Middle Class Health Benefits Tax Repeal Act of 2017
Policy area: Taxation

Summary:
Middle Class Health Benefits Tax Repeal Act of 2017
This bill amends the Internal Revenue Code to repeal, beginning with taxable years beginning after December 31, 2017, the excise tax on employer-sponsored health care coverage for which there is an excess benefit (high-cost plans).

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 40 Introduced in Senate (IS)]

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115th CONGRESS
  1st Session
                                 S. 40

To amend the Internal Revenue Code of 1986 to repeal the excise tax on 
             high cost employer-sponsored health coverage.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 5, 2017

  Mr. Heller introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to repeal the excise tax on 
             high cost employer-sponsored health coverage.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Middle Class Health Benefits Tax 
Repeal Act of 2017''.

SEC. 2. REPEAL OF EXCISE TAX ON HIGH COST EMPLOYER-SPONSORED HEALTH 
              COVERAGE.

    (a) In General.--Chapter 43 of the Internal Revenue Code of 1986 is 
amended by striking section 4980I.
    (b) Conforming Amendment.--Section 6051 of such Code is amended--
            (1) in paragraph (14) of subsection (a), by striking 
        ``section 4980I(d)(1)'' and inserting ``subsection (g)'', and
            (2) by adding at the end the following:
    ``(g) Applicable Employer-Sponsored Coverage.--For purposes of 
subsection (a)(14)--
            ``(1) In general.--The term `applicable employer-sponsored 
        coverage' means, with respect to any employee, coverage under 
        any group health plan made available to the employee by an 
        employer which is excludable from the employee's gross income 
        under section 106, or would be so excludable if it were 
        employer-provided coverage (within the meaning of such section 
        106).
            ``(2) Exceptions.--The term `applicable employer-sponsored 
        coverage' shall not include--
                    ``(A) any coverage (whether through insurance or 
                otherwise) described in section 9832(c)(1) (other than 
                subparagraph (G) thereof) or for long-term care, or
                    ``(B) any coverage under a separate policy, 
                certificate, or contract of insurance which provides 
                benefits substantially all of which are for treatment 
                of the mouth (including any organ or structure within 
                the mouth) or for treatment of the eye, or
                    ``(C) any coverage described in section 9832(c)(3) 
                the payment for which is not excludable from gross 
                income and for which a deduction under section 162(l) 
                is not allowable.
            ``(3) Coverage includes employee paid portion.--Coverage 
        shall be treated as applicable employer-sponsored coverage 
        without regard to whether the employer or employee pays for the 
        coverage.
            ``(4) Governmental plans included.--Applicable employer-
        sponsored coverage shall include coverage under any group 
        health plan established and maintained primarily for its 
        civilian employees by the Government of the United States, by 
        the government of any State or political subdivision thereof, 
        or by any agency or instrumentality of any such government.
            ``(5) Cost of coverage.--
                    ``(A) Health fsas.--In the case of applicable 
                employer-sponsored coverage consisting of coverage 
                under a flexible spending arrangement (as defined in 
                section 106(c)(2)), the cost of the coverage shall be 
                equal to the amount determined under rules similar to 
                the rules of section 4980B(f)(4) with respect to any 
                reimbursement under the arrangement reduced by the 
                contributions described in subsection (a)(14)(B).
                    ``(B) Archer msas and hsas.--In the case of 
                applicable employer-sponsored coverage consisting of 
                coverage under an arrangement under which the employer 
                makes contributions described in subsection (b) or (d) 
                of section 106, the cost of the coverage shall be equal 
                to the amount of employer contributions under the 
                arrangement.
                    ``(C) Allocation on a monthly basis.--If cost is 
                determined on other than a monthly basis, the cost 
                shall be allocated to months in a taxable period on 
                such basis as the Secretary may prescribe.''.
    (c) Clerical Amendment.--The table of sections for chapter 43 of 
such Code is amended by striking the item relating to section 4980I.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.
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