II
109th CONGRESS
1st Session
S. 897
IN THE SENATE OF THE UNITED STATES
April 25, 2005
Mr. Hatch (for himself, Mr. Grassley, and Mr. Baucus) 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 clarify the calculation of the reserve allowance for medical benefits of plans sponsored by bona fide associations.
Allowance of reserve for medical benefits of plans sponsored by bona fide associations
In general
Section 419A(c) of the Internal Revenue Code of 1986 (relating to account limit) is amended by adding at the end the following new paragraph:
Additional reserve for medical benefits of bona fide association plans
In general
An applicable account limit for any taxable year may include a reserve in an amount not to exceed 35 percent of the sum of—
the qualified direct costs, and
the change in claims incurred, but unpaid, for such taxable year with respect to medical benefits (other than post-retirement medical benefits).
Applicable account limit
For purposes of this subsection, the term applicable account limit means an account limit for a qualified asset account with respect to medical benefits provided through a plan maintained by a bona fide association (as defined in section 2791(d)(3) of the Public Health Service Act (42 U.S.C. 300gg–91(d)(3))
.
Effective date
The amendment made by this section shall apply to taxable years ending after December 31, 2004.