[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1022 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                S. 1022

 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.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 12, 2001

  Mr. Warner introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 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.

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

SECTION 1. 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 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 program 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. 2. 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 223 as 
section 224 and by inserting after section 222 the following new 
section:

``SEC. 223. 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 such Code is amended by 
inserting after paragraph (18) the following new paragraph:
            ``(19) Tricare supplemental premiums or enrollment fees.--
        The deduction allowed by section 223.''
    (c) Clerical Amendment.--The table of sections for part VII of 
subchapter B of chapter 1 of such Code is amended by striking the last 
item and inserting the following new items:

                              ``Sec. 223. TRICARE supplemental premiums 
                                        or enrollment fees.
                              ``Sec. 224. 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.
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