1.This Act may be cited as the
Tax Equity for Health Plan
Beneficiaries Act of 2009
.
2.Application of
accident and health plans to eligible beneficiaries
(a)Exclusion of
contributionsSection 106 of the Internal Revenue Code of 1986
(relating to contributions by employer to accident and health plans) is amended
by adding at the end the following new subsection:
(f)Coverage
provided for eligible beneficiaries of employees
(1)Subsection (a) shall apply with respect to any eligible
beneficiary of the employee.
(2)For purposes of
this subsection, the term eligible beneficiary means any
individual who is eligible to receive benefits or coverage under an accident or
health plan.
.
(b)Exclusion of
amounts expended for medical careThe first sentence of section
105(b) of such Code (relating to amounts expended for medical care) is
amended—
(1)by striking “and his dependents” and
inserting “his dependents”, and
(2)by inserting
before the period the following: and any eligible beneficiary (within
the meaning of section 106(f)) with respect to the taxpayer
.
(c)
(1)Section 3121(a)(2)
of such Code is amended—
(A)by striking or any of his
dependents
in the matter preceding subparagraph (A) and inserting
, any of his dependents, or any eligible beneficiary (within the meaning
of section 106(f)) with respect to the employee
,
(B)by striking or any of his
dependents,
in subparagraph (A) and inserting , any of his
dependents, or any eligible beneficiary (within the meaning of section 106(f))
with respect to the employee,
, and
(C)by striking and their
dependents
both places it appears and inserting and such
employees’ dependents and eligible beneficiaries (within the meaning of section
106(f))
.
(2)Section 3231(e)(1)
of such Code is amended—
(A)by striking or any of his
dependents
and inserting , any of his dependents, or any
eligible beneficiary (within the meaning of section 106(f)) with respect to the
employee,
, and
(B)by striking and their
dependents
both places it appears and inserting and such
employees’ dependents and eligible beneficiaries (within the meaning of section
106(f))
.
(3)Section 3306(b)(2)
of such Code is amended—
(A)by striking or any of his
dependents
in the matter preceding subparagraph (A) and inserting
, any of his dependents, or any eligible beneficiary (within the meaning
of section 106(f)) with respect to the employee,
,
(B)by striking or any of his
dependents
in subparagraph (A) and inserting , any of his
dependents, or any eligible beneficiary (within the meaning of section 106(f))
with respect to the employee
, and
(C)by striking “and their dependents” both
places it appears and inserting and such employees’ dependents and
eligible beneficiaries (within the meaning of section 106(f))
.
(4)Section 3401(a) of
such Code is amended by striking or
at the end of paragraph
(22), by striking the period at the end of paragraph (23) and inserting
; or
, and by inserting after paragraph (23) the following new
paragraph:
(24)for any payment made to or for the benefit
of an employee or any eligible beneficiary (within the meaning of section
106(f)) if at the time of such payment it is reasonable to believe that the
employee will be able to exclude such payment from income under section 106 or
under section 105 by reference in section 105(b) to section
106(f).
.
(d)The amendments made by this section shall apply to taxable
years beginning after December 31, 2009.
3.Expansion of
dependency for purposes of deduction for health insurance costs of
self-employed individuals
(a)Paragraph (1) of
section 162(l) of the Internal Revenue Code of 1986 (relating to special rules
for health insurance costs of self-employed individuals) is amended to read as
follows:
(1)In the case of a
taxpayer who is an employee within the meaning of section 401(c)(1), there
shall be allowed as a deduction under this section an amount equal to the
amount paid during the taxable year for insurance which constitutes medical
care for—
(A)the
taxpayer,
(B)the taxpayer’s
spouse,
(C)the taxpayer’s
dependents, and
(D)any individual
who—
(i)satisfies the age
requirements of section 152(c)(3)(A),
(ii)bears a
relationship to the taxpayer described in section 152(d)(2)(H), and
(iii)meets the
requirements of section 152(d)(1)(C), and
(E)one individual
who—
(i)does not satisfy
the age requirements of section 152(c)(3)(A),
(ii)bears a
relationship to the taxpayer described in section 152(d)(2)(H),
(iii)meets the
requirements of section 152(d)(1)(D), and
(iv)is not the spouse
of the taxpayer and does not bear any relationship to the taxpayer described in
subparagraphs (A) through (G) of section
152(d)(2).
.
(b)Subparagraph (B) of
section 162(l)(2) of such Code is amended by inserting , any dependent,
or individual described in subparagraph (D) or (E) of paragraph (1) with
respect to
after spouse
.
(c)The amendments made by
this section shall apply to taxable years beginning after December 31,
2009.
4.Extension to
eligible beneficiaries of sick and accident benefits provided to members of a
voluntary employees’ beneficiary association and their dependents
(a)Section 501(c)(9) of
the Internal Revenue Code of 1986 (relating to list of exempt organizations) is
amended by adding at the end the following new sentence: For purposes of
providing for the payment of sick and accident benefits to members of such an
association and their dependents, the term dependents shall
include any individual who is an eligible beneficiary (within the meaning of
section 106(f)), as determined under the terms of a medical benefit, health
insurance, or other program under which members and their dependents are
entitled to sick and accident benefits.
.
(b)The amendments made by this section shall apply to taxable
years beginning after December 31, 2009.
5.Flexible spending
arrangements and health reimbursement arrangementsThe
Secretary of Treasury shall issue guidance of general applicability providing
that medical expenses that otherwise qualify—
(1)for reimbursement from a flexible spending
arrangement under regulations in effect on the date of the enactment of this
Act may be reimbursed from an employee’s flexible spending arrangement,
notwithstanding the fact that such expenses are attributable to any individual
who is not the employee’s spouse or dependent (within the meaning of section
105(b) of the Internal Revenue Code of 1986) but is an eligible beneficiary
(within the meaning of section 106(f) of such Code) under the flexible spending
arrangement with respect to the employee, and
(2)for reimbursement from a health
reimbursement arrangement under regulations in effect on the date of the
enactment of this Act may be reimbursed from an employee’s health reimbursement
arrangement, notwithstanding the fact that such expenses are attributable to an
individual who is not a spouse or dependent (within the meaning of section
105(b) of such Code) but is an eligible beneficiary (within the meaning of
section 106(f) of such Code) under the health reimbursement arrangement with
respect to the employee.
6.Extension of
qualified medical expenses from health savings accounts
(a)Subparagraph (A) of section 223(d)(2) of the Internal
Revenue Code of 1986 (relating to qualified medical expenses) is
amended—
(1)by striking
and any dependent
and inserting any dependent
,
and
(2)by inserting
, and any qualified beneficiary
after
thereof)
.
(b)Section 223(d)(2) of such Code is amended by
inserting after subparagraph (C) the following new subparagraph:
(D)For purposes of subparagraph (A), the term
qualified beneficiary means any individual who is described in
subparagraph (D) or (E) of section
162(l)(1).
.
(c)The amendments made by this section shall apply to taxable
years beginning after December 31, 2009.