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.

        [Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1231 Introduced in House (IH)]

108th CONGRESS
1st Session
H. R. 1231

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 HOUSE OF REPRESENTATIVES

March 12, 2003

Mr. Tom Davis of Virginia (for himself, Mrs. Jo Ann Davis of Virginia,
Mr. Waxman, Mr. Davis of Illinois, Mr. Moran of Virginia, Mr. Wolf, Mr.
Hoyer, Ms. Norton, Mr. Wynn, and Mr. Van Hollen) introduced the
following bill; which was referred to the Committee on Ways and Means,
and in addition to the Committees on Government Reform and Armed
Services, for a period to be subsequently determined by the Speaker, in
each case for consideration of such provisions as fall within the
jurisdiction of the committee concerned

_______________________________________________________________________

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 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. 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.

SEC. 3. 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 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 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.
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