II 110th CONGRESS 2d Session S. 2835 IN THE SENATE OF THE UNITED STATES April 9, 2008 Mr. DeMint (for himself, Mr. Kyl, Mr. Burr, Mr. Coburn, Mr. Isakson, Mr. Vitter, Mr. Inhofe, Mr. Graham, Mr. Chambliss, Mrs. Hutchison, Mr. Corker, Mr. Martinez, Mr. Craig, and Mr. Thune) 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 allow the purchase of health insurance with pre-tax dollars, and for other purposes.

1.

Above-the-line deduction for health insurance premiums

(a)

In general

Section 62(a) of the Internal Revenue Code of 1986 (defining adjusted gross income) is amended by inserting after paragraph (21) the following new paragraph: (22)

Health insurance payments

(A)

In general

Any amount allowable as a deduction under section 213 (determined without regard to any income limitation under subsection (a) thereof) by reason of subsection (d)(1)(D) thereof for qualified health insurance. (B)

Qualified health insurance

For purposes of this paragraph— (i)

In general

The term qualified health insurance means insurance which constitutes medical care as defined in 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. (ii)

Exclusion of certain other contracts

Such term shall not include insurance if a substantial portion of its benefits are excepted benefits (as defined in section 9832(c)). . (b)

Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2007.

2.

Use of health savings accounts for non-group high deductible health plan premiums

(a)

In general

Section 223(d)(2)(C) of the Internal Revenue Code of 1986 (relating to exceptions) 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 adding at the end the following new clause: (v)a high deductible health plan, other than a group health plan (as defined in section 5000(b)(1)). . (b)

Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2007.