109 HR 218 IH: Health Care Tax Deduction Act of 2005 U.S. House of Representatives 2005-01-04 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 109th CONGRESS 1st Session H. R. 218 IN THE HOUSE OF REPRESENTATIVES January 4, 2005 Mr. Stearns 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 allow a deduction for amounts paid for health insurance and prescription drug costs of individuals.

1.

Short title

This Act may be cited as the Health Care Tax Deduction Act of 2005.

2.

Deduction for health insurance and prescription drug costs of individuals

(a)

In general

Part VII of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by redesignating section 224 as section 225 and by inserting after section 223 the following new section:

224.

Health insurance and prescription drug costs

(a)

In general

In the case of an individual, there shall be allowed as a deduction an amount equal to the sum of the amount paid during the taxable year for— (1) insurance which constitutes medical care for the taxpayer and the taxpayer's spouse and dependents, plus (2)unreimbursed prescription drug expenses paid by the taxpayer for the taxpayer and the taxpayer's spouse and dependents. (b)

Limitations and special rules

(1)

Employer contributions to cafeteria plans, flexible spending arrangements, and medical savings accounts

Employer contributions to a cafeteria plan, a flexible spending or similar arrangement, a medical savings account, or a health savings account which are excluded from gross income under section 106 shall be treated for purposes of subsection (a) as paid by the employer. (2)

Deduction not available for payment of ancillary coverage premiums

Any amount paid as a premium for insurance which provides for— (A)coverage for accidents, disability, dental care, vision care, or a specified illness, or (B)making payments of a fixed amount per day (or other period) by reason of being hospitalized, shall not be taken into account under subsection (a). (3)

Coordination with deduction for health insurance of self-employed individuals

The amount taken into account by the taxpayer in computing the deduction under section 162(l) shall not be taken into account under this section. (4)

Coordination with medical expense deduction

The amount taken into account by the taxpayer in computing the deduction under this section shall not be taken into account under section 213. (c)

Definitions

For purposes of this section— (1)

Medical care

(A)

In general

The term medical care has the meaning given such term by section 213(d) without regard to— (i)paragraph (1)(C) thereof, and (ii)so much of paragraph (1)(D) thereof as relates to qualified long-term care insurance contracts. (B)

Exclusion of certain other contracts

The term medical care shall not include insurance if a substantial portion of its benefits are excepted benefits (as defined in section 9832(c)). (2)

Unreimbursed prescription drug expenses

The term unreimbursed prescription drug expenses means amounts paid or incurred for a prescribed drug (as defined by section 213(d)(3)) the cost of which to the taxpayer is not reimbursed by insurance or otherwise. (d)

Regulations

The Secretary shall prescribe such regulations as may be appropriate to carry out this section.

. (b)

Deduction allowed whether or not taxpayer itemizes other deductions

Subsection (a) of section 62 of such Code is amended by inserting after paragraph (19) the following new item: (20)

Health insurance and prescription drug costs

The deduction allowed by section 223.. (c)

Clerical amendments

The table of sections for part VII of subchapter B of chapter 1 of such Code is amended by striking the last item and inserting the following new items: Sec. 224. Health insurance and prescription drug costs Sec. 225. Cross reference. (d)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2005.