[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 897 Introduced in Senate (IS)]







109th CONGRESS
  1st Session
                                 S. 897

 To amend the Internal Revenue Code of 1986 to clarify the calculation 
  of the reserve allowance for medical benefits of plans sponsored by 
                        bona fide associations.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 25, 2005

 Mr. Hatch (for himself, Mr. Grassley, and Mr. Baucus) 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 clarify the calculation 
  of the reserve allowance for medical benefits of plans sponsored by 
                        bona fide associations.

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

SECTION 1. ALLOWANCE OF RESERVE FOR MEDICAL BENEFITS OF PLANS SPONSORED 
              BY BONA FIDE ASSOCIATIONS.

    (a) In General.--Section 419A(c) of the Internal Revenue Code of 
1986 (relating to account limit) is amended by adding at the end the 
following new paragraph:
            ``(6) Additional reserve for medical benefits of bona fide 
        association plans.--
                    ``(A) In general.--An applicable account limit for 
                any taxable year may include a reserve in an amount not 
                to exceed 35 percent of the sum of--
                            ``(i) the qualified direct costs, and
                            ``(ii) the change in claims incurred, but 
                        unpaid, for such taxable year with respect to 
                        medical benefits (other than post-retirement 
                        medical benefits).
                    ``(B) Applicable account limit.--For purposes of 
                this subsection, the term `applicable account limit' 
                means an account limit for a qualified asset account 
                with respect to medical benefits provided through a 
                plan maintained by a bona fide association (as defined 
                in section 2791(d)(3) of the Public Health Service Act 
                (42 U.S.C. 300gg-91(d)(3))''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years ending after December 31, 2004.
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