[Congressional Record Volume 155, Number 34 (Thursday, February 26, 2009)]
[Senate]
[Page S2565]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WEBB (for himself, Mr. Burr, Ms. Collins, Mr. Warner, Mr. 
        Durbin, Mr. Cardin, Mr. Rockefeller, Mr. Akaka, Mr. Dodd, Mr. 
        Bunning, and Mr. Kerry):
  S. 491. A bill to amend the Internal Revenue Code of 1986 to allow 
Federal civilian and military retirees to pay health insurance premiums 
on a pretax basis and to allow a deduction for TRICARE supplemental 
premiums; to the Committee on Finance.
  Mr. WEBB. Mr. President, today I rise to introduce the bipartisan 
Federal and Military Retiree Health Care Equity Act. I introduce this 
bill with Senators Burr, Collins, Cardin, Durbin, Warner, Rockefeller, 
Akaka, Dodd, Kerry, and Bunning. This legislation will provide some 
relief for our Nation's Federal and military retirees from the 
increases in their health care plans. This measure extends premium 
conversion to Federal and military retirees, allowing them to pay their 
health insurance premiums with pretax dollars.
  I believe strongly in protecting the rights and benefits of our 
federal and military retirees, many of whom have given years of service 
to our country. I commend their service to our Nation.
  The increasing cost of health care is a critical issue, especially to 
Federal and military retirees living on a fixed income. Health care 
premiums are rising for Federal and military retirees and their 
families. This legislation will help to ensure that more Federal and 
military retirees are able to continue their health care coverage with 
the Federal Employee Health Benefits Plan and supplemental TRICARE 
health insurance plans as premiums continue to rise.
  In the fall of 2000 premium conversion became available to active 
Federal employees who participate in the Federal Employees Health 
Benefits Program. It is a benefit already available to many private 
sector employees. While premium conversion does not directly affect the 
amount of the Federal Employee Health Benefit Plan premiums, it helps 
to offset some of the increase by reducing an individual's Federal tax 
liability.
  Extending this benefit to Federal employees requires a change in the 
tax law, specifically section 125 of the Internal Revenue Code. This 
legislation makes the necessary change in the tax code. Under the 
legislation, the benefit would be concurrently afforded to our Nation's 
military retirees as well to assist with increasing health care costs.
  A number of organizations representing federal and military retirees 
are strongly behind this initiative: National Active and Retired 
Federal Employees Association, The Military Coalition, National 
Treasury Employees Union, National Association of Postmasters of the 
United States, Professional Aviation Safety Specialists, National 
Association of Postal Supervisors, National Federation of Federal 
Employees, National Association of Government Employees, National Rural 
Letter Carrier Association, National Postal Mail Handlers, American 
Foreign Service Association, and American Postal Workers Union.
  The Federal and Military Retiree Health Care Equity Act has enjoyed 
overwhelming, bipartisan support for four Congresses. This is a matter 
of basic fairness. Our Federal employee and military retirees deserve 
access to the same quality, affordable health care they received as 
active members of the civil service and military. I encourage my 
colleagues to join me in moving this legislation forward in this 
Congress.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 491

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Federal and Military Retiree 
     Health Care Equity Act''.

     SEC. 2. PRETAX PAYMENT OF HEALTH INSURANCE PREMIUMS BY 
                   FEDERAL CIVILIAN AND MILITARY RETIREES.

       (a) In General.--Subsection (g) of section 125 of the 
     Internal Revenue Code of 1986 (relating to cafeteria plans) 
     is amended by adding at the end the following new paragraph:
       ``(5) Health insurance premiums of federal civilian and 
     military retirees.--
       ``(A) FEHBP premiums.--Nothing in this section shall 
     prevent the benefits of this section from being allowed to an 
     annuitant, as defined in paragraph (3) of section 8901, title 
     5, United States Code, with respect to a choice between the 
     annuity or compensation referred to in such paragraph and 
     benefits under the health benefits program established by 
     chapter 89 of such title 5.
       ``(B) TRICARE premiums.--Nothing in this section shall 
     prevent the benefits of this section from being allowed to an 
     individual receiving retired or retainer pay by reason of 
     being a member or former member of the uniformed services of 
     the United States with respect to a choice between such pay 
     and benefits under the health benefits programs established 
     by chapter 55 of title 10, United States Code.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 3. DEDUCTION FOR TRICARE SUPPLEMENTAL PREMIUMS.

       (a) In General.--Part VII of subchapter B of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to additional 
     itemized deductions for individuals) is amended by 
     redesignating section 224 as section 225 and by inserting 
     after section 223 the following new section:

     ``SEC. 224. TRICARE SUPPLEMENTAL PREMIUMS OR ENROLLMENT FEES.

       ``(a) Allowance of Deduction.--In the case of an 
     individual, there shall be allowed as a deduction the amounts 
     paid during the taxable year by the taxpayer for insurance 
     purchased as supplemental coverage to the health benefits 
     programs established by chapter 55 of title 10, United States 
     Code, for the taxpayer and the taxpayer's spouse and 
     dependents.
       ``(b) Coordination With Medical Deduction.--Any amount 
     allowed as a deduction under subsection (a) shall not be 
     taken into account in computing the amount allowable to the 
     taxpayer as a deduction under section 213(a).''.
       (b) Deduction Allowed Whether or Not Individual Itemizes 
     Other Deductions.--Subsection (a) of section 62 of the 
     Internal Revenue Code of 1986 (defining adjusted gross 
     income) is amended by inserting after paragraph (21) the 
     following new paragraph:
       ``(22) TRICARE supplemental premiums or enrollment fees.--
     The deduction allowed by section 224.''.
       (c) Clerical Amendment.--The table of sections for part VII 
     of subchapter B of chapter 1 of the Internal Revenue Code of 
     1986 is amended by striking the last item and inserting the 
     following new items:

``Sec. 224. TRICARE supplemental premiums or enrollment fees.
``Sec. 225. Cross reference.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 4. IMPLEMENTATION.

       (a) FEHBP Premium Conversion Option for Federal Civilian 
     Retirees.--The Director of the Office of Personnel Management 
     shall take such actions as the Director considers necessary 
     so that the option made possible by section 125(g)(5)(A) of 
     the Internal Revenue Code of 1986 (as added by section 2) 
     shall be offered beginning with the first open enrollment 
     period, afforded under section 8905(g)(1) of title 5, United 
     States Code, which begins not less than 90 days after the 
     date of the enactment of this Act.
       (b) TRICARE Premium Conversion Option for Military 
     Retirees.--The Secretary of Defense, after consulting with 
     the other administering Secretaries (as specified in section 
     1073 of title 10, United States Code), shall take such 
     actions as the Secretary considers necessary so that the 
     option made possible by section 125(g)(5)(B) of the Internal 
     Revenue Code of 1986 (as so added) shall be offered beginning 
     with the first open enrollment period afforded under health 
     benefits programs established under chapter 55 of such title, 
     which begins not less than 90 days after the date of the 
     enactment of this Act.
                                 ______