[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 436 Engrossed in House (EH)]

112th CONGRESS
  2d Session
                                H. R. 436

_______________________________________________________________________

                                 AN ACT


 
To amend the Internal Revenue Code of 1986 to repeal the excise tax on 
                            medical devices.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Health Care Cost 
Reduction Act of 2012''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Repeal of medical device excise tax.
Sec. 3. Repeal of disqualification of expenses for over-the-counter 
                            drugs under certain accounts and 
                            arrangements.
Sec. 4. Taxable distributions of unused balances under health flexible 
                            spending arrangements.
Sec. 5. Recapture of overpayments resulting from certain federally-
                            subsidized health insurance.

SEC. 2. REPEAL OF MEDICAL DEVICE EXCISE TAX.

    (a) In General.--Chapter 32 of the Internal Revenue Code of 1986 is 
amended by striking subchapter E.
    (b) Conforming Amendments.--
            (1) Subsection (a) of section 4221 of such Code is amended 
        by striking the last sentence.
            (2) Paragraph (2) of section 6416(b) of such Code is 
        amended by striking the last sentence.
    (c) Clerical Amendment.--The table of subchapters for chapter 32 of 
such Code is amended by striking the item relating to subchapter E.

SEC. 3. REPEAL OF DISQUALIFICATION OF EXPENSES FOR OVER-THE-COUNTER 
              DRUGS UNDER CERTAIN ACCOUNTS AND ARRANGEMENTS.

    (a) HSAs.--Subparagraph (A) of section 223(d)(2) of the Internal 
Revenue Code of 1986 is amended by striking the last sentence.
    (b) Archer MSAs.--Subparagraph (A) of section 220(d)(2) of such 
Code is amended by striking the last sentence.
    (c) Health Flexible Spending Arrangements and Health Reimbursement 
Arrangements.--Section 106 of such Code is amended by striking 
subsection (f).
    (d) Effective Date.--The amendments made by this section shall 
apply to expenses incurred after December 31, 2012.

SEC. 4. TAXABLE DISTRIBUTIONS OF UNUSED BALANCES UNDER HEALTH FLEXIBLE 
              SPENDING ARRANGEMENTS.

    (a) In General.--Section 125 of the Internal Revenue Code of 1986 
is amended by redesignating subsections (k) and (l) as subsections (l) 
and (m), respectively, and by inserting after subsection (j) the 
following new subsection:
    ``(k) Taxable Distributions of Unused Balances Under Health 
Flexible Spending Arrangements.--
            ``(1) In general.--For purposes of this section and 
        sections 105(b) and 106, a plan or other arrangement which (but 
        for any qualified distribution) would be a health flexible 
        spending arrangement shall not fail to be treated as a 
        cafeteria plan or health flexible spending arrangement (and 
        shall not fail to be treated as an accident or health plan) 
        merely because such arrangement provides for qualified 
        distributions.
            ``(2) Qualified distributions.--For purposes of this 
        subsection, the term `qualified distribution' means any 
        distribution to an individual under the arrangement referred to 
        in paragraph (1) with respect to any plan year if--
                    ``(A) such distribution is made after the last date 
                on which requests for reimbursement under such 
                arrangement for such plan year may be made and not 
                later than the end of the 7th month following the close 
                of such plan year, and
                    ``(B) such distribution does not exceed the lesser 
                of--
                            ``(i) $500, or
                            ``(ii) the excess of--
                                    ``(I) the salary reduction 
                                contributions made under such 
                                arrangement for such plan year, over
                                    ``(II) the reimbursements for 
                                expenses incurred for medical care made 
                                under such arrangement for such plan 
                                year.
            ``(3) Tax treatment of qualified distributions.--Qualified 
        distributions shall be includible in the gross income of the 
        employee in the taxable year in which distributed and shall be 
        taken into account as wages or compensation under the 
        applicable provisions of subtitle C when so distributed.
            ``(4) Coordination with qualified reservist 
        distributions.--A qualified reservist distribution (as defined 
        in subsection (h)(2)) shall not be treated as a qualified 
        distribution and shall not be taken into account in applying 
        the limitation of paragraph (2)(B)(i).''.
    (b) Conforming Amendment.--Paragraph (1) of section 409A(d) of such 
Code is amended by striking ``and'' at the end of subparagraph (A), by 
striking the period at the end of subparagraph (B) and inserting ``, 
and'', and by adding at the end the following new subparagraph:
                    ``(C) a health flexible spending arrangement to 
                which subsection (h) or (k) of section 125 applies.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2012.

SEC. 5. RECAPTURE OF OVERPAYMENTS RESULTING FROM CERTAIN FEDERALLY-
              SUBSIDIZED HEALTH INSURANCE.

    (a) In General.--Paragraph (2) of section 36B(f) of the Internal 
Revenue Code of 1986 is amended by striking subparagraph (B).
    (b) Conforming Amendment.--So much of paragraph (2) of section 
36B(f) of such Code, as amended by subsection (a), as precedes 
``advance payments'' is amended to read as follows:
            ``(2) Excess advance payments.--If the''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2013.

            Passed the House of Representatives June 7, 2012.

            Attest:

                                                                 Clerk.
112th CONGRESS

  2d Session

                               H. R. 436

_______________________________________________________________________

                                 AN ACT

To amend the Internal Revenue Code of 1986 to repeal the excise tax on 
                            medical devices.