,,ii  #aac? ,,congress  #a/ ,session    
,s4 #gbh  ,,9 ,,! ,,s5ate ,,( ,,!       
,,unit$ ,,/ates  ,april #ae1 #bjac ,mr4 
,s*um] 7= himself1 ,ms4 ,coll9s1 & ,mr4 
,c>d97 introduc$ ! foll[+ bill2 :i* 0   
read twice & ref]r$ to ! ,committee on  
,f9ance  ,a ,,bill  ,to am5d ! ,int]nal 
,rev5ue ,code ( #aihf to ext5d !        
exclusion f gross income =              
employ]-provid$ heal? cov]age =         
employees' sp\ses & dep5d5t *ildr5 to   
cov]age provid$ to o!r eligible         
designat$ b5efici>ies ( employees4  #a4 
,%ort title ,?is ,act may be cit$ z !   
,tax ,p>ity = ,heal? ,plan ,b5efici>ies 
,act ( #bjac4  #b4 ,application (       
accid5t & heal? plans to eligible       
b5efici>ies  7a7 ,exclusion (           
contributions ,section #ajf ( ! ,int]nal
 ,rev5ue ,code ( #aihf is am5d$ by add+ 
at ! end ! foll[+ new subsection3  7g7  
,cov]age provid$ = eligible b5efici>ies 
( employees  7#a7 ,9 g5]al ,subsection  
7a7 %all apply ) respect to             
employ]-provid$ cov]age "u an accid5t or

 heal? plan = any eligible b5efici>y ( !
 employee4  7#b7 ,eligible b5efici>y ,= 
purposes ( ?is subsection1 ! t]m        
eligible b5efici>y means any individual 
:o is eligible to receive b5efits or    
cov]age "u an accid5t or heal? plan4  4 
7b7 ,exclusion ( am\nts exp5d$ = m$ical 
c>e ,! fir/ s5t5ce ( section #aje7;b7 ( 
! ,int]nal ,rev5ue ,code ( #aihf is     
am5d$--  7#a7 by /rik+ 8& any *ild0 &   
ins]t+ 8any *ild01 &  7#b7 by ins]t+ 1 &
 any eligible b5efici>y 7)9 ! mean+ (   
section #ajf7;g77 ) respect to ! taxpay]
 aft] age #bg4  7c7 ,payroll taxes  7#a7
 ,section #caba7;a77#b7 ( ! ,int]nal    
,rev5ue ,code ( #aihf is am5d$--  7,a7  
by /rik+ or any ( 8 dep5d5ts 9 ! matt]  
prec$+ subp>agraph 7,a7 & ins]t+ 1 any (
 8 dep5d5ts1 or any eligible b5efici>y  
7)9 ! mean+ ( section #ajf7;g77 )       
respect to ! employee1  7,b7 by /rik+ or
 any ( 8 dep5d5ts1 9 subp>agraph 7,a7 & 
ins]t+ 1 any ( 8 dep5d5ts1 or any       
eligible b5efici>y 7)9 ! mean+ ( section
 #ajf7;g77 ) respect to ! employee11 &  

7,c7 by /rik+ & _! dep5d5ts bo? places x
 appe>s & ins]t+ & su* employees'       
dep5d5ts & eligible b5efici>ies 7)9 !   
mean+ ( section #ajf7;g774  7#b7        
,section #cbca7;e77#a7 ( su* ,code is   
am5d$--  7,a7 by /rik+ or any ( 8       
dep5d5ts & ins]t+ 1 any ( 8 dep5d5ts1 or
 any eligible b5efici>y 7)9 ! mean+ (   
section #ajf7;g77 ) respect to !        
employee11 &  7,b7 by /rik+ & _!        
dep5d5ts bo? places x appe>s & ins]t+ & 
su* employees' dep5d5ts & eligible      
b5efici>ies 7)9 ! mean+ ( section       
#ajf7;g774  7#c7 ,section #ccjf7;b77#b7 
( su* ,code is am5d$--  7,a7 by /rik+ or
 any ( 8 dep5d5ts 9 ! matt] prec$+      
subp>agraph 7,a7 & ins]t+ 1 any ( 8     
dep5d5ts1 or any eligible b5efici>y 7)9 
! mean+ ( section #ajf7;g77 ) respect to
 ! employee11  7,b7 by /rik+ or any ( 8 
dep5d5ts 9 subp>agraph 7,a7 & ins]t+ 1  
any ( 8 dep5d5ts1 or any eligible       
b5efici>y 7)9 ! mean+ ( section         
#ajf7;g77 ) respect to ! employee1 &    
7,c7 by /rik+ 8& _! dep5d5ts0 bo? places

 x appe>s & ins]t+ & su* employees'     
dep5d5ts & eligible b5efici>ies 7)9 !   
mean+ ( section #ajf7;g774  7#d7        
,section #cdja7;a7 ( su* ,code is am5d$ 
by /rik+ or at ! end ( p>agraph 7#bb71  
by /rik+ ! p]iod at ! end ( p>agraph    
7#bc7 & ins]t+ 2 or1 & by ins]t+ aft]   
p>agraph 7#bc7 ! foll[+ new p>agraph3   
7#bd7 = any paym5t made to or = ! b5efit
 ( an employee or any eligible b5efici>y
 7)9 ! mean+ ( section #ajf7;g77 if at !
 "t ( su* paym5t x is reasonable to     
believe t ! employee w be able to       
exclude su* paym5t f income "u section  
#ajf or "u section #aje by ref]5ce 9    
section #aje7;b7 to section #ajf7;g74  4
  7d7 ,effective date ,! am5dm5ts made  
by ?is section %all apply to taxable    
ye>s beg9n+ aft] ,decemb] #ca1 #bjac4   
#c4 ,expansion ( dep5d5cy = purposes (  
d$uction = heal? insurance co/s (       
self-employ$ individuals  7a7 ,9 g5]al  
,p>agraph 7#a7 ( section #afb7l7 ( !    
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by /rik+ & at ! end ( subp>agraph 7,c71 

by /rik+ ! p]iod at ! end ( subp>agraph 
7,d7 & ins]t+ a comma & by add+ at ! end
 ! foll[+ new subp>agraphs3  7,e7 any   
individual :o--  7i7 satisfies ! age    
requirem5ts ( section #aeb7;c77#c77;,a71
  7ii7 be>s a relation%ip to ! taxpay]  
describ$ 9 section #aeb7;d77#b77;,h71 & 
7iii7 meets ! requirem5ts ( section     
#aeb7;d77#a77;,c71 &  7,f7 "o individual
 :o--  7i7 is at lea/ age #ai1  7ii7    
be>s a relation%ip to ! taxpay] describ$
 9 section #aeb7;d77#b77;,h71 &  7iii7  
is n ! sp\se ( ! taxpay] & does n be>   
any relation%ip to ! taxpay] describ$ 9 
subp>agraphs 7,a7 ?r\gh 7,g7 ( section  
#aeb7;d77#b74  4  7b7 ,con=m+ am5dm5t   
,subp>agraph 7,b7 ( section #afb7l77#b7 
( su* ,code is am5d$ by ins]t+ 1 7,e71  
or 7,f7 aft] subp>agraph 7,d74  7c7     
,effective date ,! am5dm5ts made by ?is 
section %all apply to taxable ye>s      
beg9n+ aft] ,decemb] #ca1 #bjac4  #d4   
,ext5sion to eligible b5efici>ies ( sick
 & accid5t b5efits provid$ to memb]s ( a
 volunt>y employees' b5efici>y          

association & _! dep5d5ts  7a7 ,9 g5]al 
,section #eja7;c77#i7 ( ! ,int]nal      
,rev5ue ,code ( #aihf is am5d$ by ins]t+
 3 & any individual :o is an eligible   
b5efici>y 7)9 ! mean+ ( section         
#ajf7;g771 z det]m9$ "u ! t]ms ( a      
m$ical b5efit1 heal? insurance1 or o!r  
program aft] age #bg4  7b7 ,effective   
date ,! am5dm5t made by ?is section %all
 apply to taxable ye>s beg9n+ aft]      
,decemb] #ca1 #bjac4  #e4 ,flexible     
sp5d+ arrangem5ts & heal? reimbursem5t  
arrangem5ts ,! ,secret>y ( ,treasury    
%all issue guidance ( g5]al             
applicability )9 #ahj days aft] ! date (
 ! enactm5t ( ?is ,act provid+ t m$ical 
exp5ses t o!rwise qualify--  7#a7 =     
reimbursem5t f a flexible sp5d+         
arrangem5t "u regulations 9 effect on   
su* date ( enactm5t may be reimburs$ f  
an employee's flexible sp5d+ arrangem5t1
 not)/&+ ! fact t su* exp5ses are       
attributable to any individual :o is n !
 employee's sp\se or dep5d5t 7)9 ! mean+
 ( section #aje7;b7 ( ! ,int]nal ,rev5ue

 ,code ( #aihf7 b is an eligible        
b5efici>y 7)9 ! mean+ ( section #ajf7;g7
 ( su* ,code7 "u ! flexible sp5d+       
arrangem5t ) respect to ! employee1 &   
7#b7 = reimbursem5t f a heal?           
reimbursem5t arrangem5t "u regulations 9
 effect on su* date ( enactm5t may be   
reimburs$ f an employee's heal?         
reimbursem5t arrangem5t1 not)/&+ ! fact 
t su* exp5ses are attributable to an    
individual :o is n a sp\se or dep5d5t   
7)9 ! mean+ ( section #aje7;b7 ( su*    
,code7 b is an eligible b5efici>y 7)9 ! 
mean+ ( section #ajf7;g7 ( su* ,code7 "u
 ! heal? reimbursem5t arrangem5t )      
respect to ! employee4  #f4 ,ext5sion ( 
qualifi$ m$ical exp5ses f heal? sav+s   
acc\nts  7a7 ,9 g5]al ,subp>agraph 7,a7 
( section #bbc7;d77#b7 ( ! ,int]nal     
,rev5ue ,code ( #aihf is am5d$--  7#a7  
by /rik+ & any dep5d5t & ins]t+ any     
dep5d5t1 &  7#b7 by ins]t+ 1 & any      
qualifi$ b5efici>y aft] !re(74  7b7     
,qualifi$ b5efici>y ,p>agraph 7#b7 (    
section #bbc7;d7 ( ! ,int]nal ,rev5ue   

,code ( #aihf is am5d$ by add+ at ! end 
! foll[+ new subp>agraph3  7,d7         
,qualifi$ b5efici>y ,= purposes (       
subp>agraph 7,a71 ! t]m qualifi$        
b5efici>y means any individual :o is    
describ$ 9 subp>agraph 7,d7 or 7,e7 (   
section #afb7l77#a74  4  7c7 ,effective 
date ,! am5dm5ts made by ?is section    
%all apply to taxable ye>s beg9n+ aft]  
,decemb] #ca1 #bjac4  #g4 ,ext5sion (   
fund+ me*anism = m$ical b5efits =       
retirees & _! families  7a7 ,9 g5]al    
,section #dja7;h7 ( ! ,int]nal ,rev5ue  
,code ( #aihf is am5d$ by ins]t+ 1 & any
 eligible b5efici>y 7)9 ! mean+ (       
section #ajf7;g77 ( ! retir$ employee   
aft] age #bg4  7b7 ,effective date ,!   
am5dm5t made by ?is section %all apply  
to taxable ye>s beg9n+ aft] ,decemb]    
#ca1 #bjac4