1.This Act may be cited as the
Comprehensive Health Care Reform Act
of 2009
.
2.Refundable credit
for health care costs
(a)Section 35 of the Internal Revenue Code of 1986 (relating
to health insurance costs of eligible individuals) is amended to read as
follows:
35.
(a)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 insurance 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)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 taxable year, plus
(2)the taxpayer’s
Social Security taxes (as defined 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)
(1)Any amount allowed as a credit under this section shall
not be taken into account in determining the amount of any deduction under this
chapter.
(2)Coordination
with health savings account contributionsFor purposes of
paragraph (1), amounts taken into account under subsection (a) for a taxable
year shall be treated as being attributable to amounts paid for insurance to
the extent of such
payments.
.
(b)
(1)Section 223(b) of
such Code, as amended by section 4, is amended by adding at the end the
following new paragraph:
(4)Coordination
with credit for health insuranceThe limitation under paragraph (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 treated as being taken into account under section 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 relating 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 section 6050T and by striking
the item relating to section 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).
(11)Section 6724(d)(2) of such Code is amended
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)The amendments made by this section shall apply to taxable
years beginning after December 31, 2009.
3.Disposition of
unused health benefits in cafeteria plans and flexible spending
arrangements
(a)Section 125 of the Internal Revenue 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)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—
(A)carried forward to
the succeeding plan year of such health flexible spending arrangement,
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-enroll in, such plan or
arrangement.
(2)Distribution of
unused health benefits on behalf of employeeFor purposes of
paragraph (1)(B), unused health benefits paid as compensation on behalf of an
employee by the employer 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 provided under section 402(e), 457(a) (with respect to contributions to
an eligible deferred compensation plan (as defined in section 457(b)) of an
eligible employer described in section 457(e)(1)(A)), or 220, and
(ii)wages to the
extent otherwise provided for amounts so excludable.
(3)Health flexible
spending arrangementFor purposes of this subsection, the term
health flexible spending arrangement means a flexible spending
arrangement (as defined in section 106(c)) that is a qualified benefit and only
permits reimbursement for expenses for medical care (as defined in section
213(d)(1)) (without regard to subparagraphs (C) and (D) thereof).
(4)For purposes of this subsection, the term unused
health benefits means the excess of—
(A)the maximum amount
of reimbursement 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)The amendment made by subsection (a) shall apply to taxable
years beginning after December 31, 2009.
4.Strengthening
Health Savings Accounts
(a)Repeal of
requirement for coverage under high deductible health plan
(1)Section 223 of the Internal Revenue Code of 1986
(relating to health savings accounts) is amended by striking subsections (a),
(b), and (c) and inserting the following:
(a)In the case of an
individual, there shall be allowed as a deduction for the taxable 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)
(1)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 contributionsThe limitation which would (but for this
paragraph) apply under this subsection to a taxpayer 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 such taxable year under section
106(d) (and such amount shall not be allowed as a deduction under subsection
(a)).
(3)Denial of
deduction to dependentsNo deduction shall be allowed under this
section to any individual with respect to whom a deduction under section 151 is
allowable to another taxpayer for a taxable year beginning in the calendar year
in which such individual’s taxable year
begins.
.
(2)
(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 redesignated by subparagraph (A)) is amended to read as
follows:
(f)Cost-of-living
adjustment
(1)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
(B)the cost-of-living
adjustment determined under section 1(f)(3) for the calendar year in which such
taxable year begins, determined by substituting calendar year
2009
for calendar year 1992
in subparagraph (B)
thereof.
(2)If
any increase under paragraph (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).
(E)Section 4973(g) of
such Code is amended—
(i)in
paragraph (1) by striking section 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 inserting 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 inserting section 223(g)
.
(b)Deduction
allowed for premium payments for high deductible policiesSection 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.
.
(c)Purchase of
Medigap policies permittedClause (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)The amendments made by
this section shall apply to taxable years beginning after December 31,
2009.
5.Repeal of 7.5
percent threshold on deduction for medical expenses
(a)Subsection (a) of
section 213 of the Internal Revenue Code of 1986 (relating to deduction for
medical expenses) is amended by striking to the extent that such
expenses exceed 7.5 percent of adjusted gross income
.
(b)The amendment made by this section shall apply to taxable
years beginning after December 31, 2009.