II
Calendar No. 427
112th CONGRESS
2d Session
H. R. 436
IN THE SENATE OF THE UNITED STATES
June 11, 2012
Received; read the first time
June 12, 2012
Read the second time and placed on the calendar
AN ACT
To amend the Internal Revenue Code of 1986 to repeal the excise tax on medical devices.
Short title; table of contents
Short title
This Act may be cited
as the Health Care Cost Reduction Act
of 2012
.
Table of contents
The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Repeal of medical device excise tax.
Sec. 3. Repeal of disqualification of expenses for over-the-counter drugs under certain accounts and arrangements.
Sec. 4. Taxable distributions of unused balances under health flexible spending arrangements.
Sec. 5. Recapture of overpayments resulting from certain federally-subsidized health insurance.
Repeal of medical device excise tax
In general
Chapter 32 of the Internal Revenue Code of 1986 is amended by striking subchapter E.
Conforming amendments
Subsection (a) of section 4221 of such Code is amended by striking the last sentence.
Paragraph (2) of section 6416(b) of such Code is amended by striking the last sentence.
Clerical amendment
The table of subchapters for chapter 32 of such Code is amended by striking the item relating to subchapter E.
Repeal of disqualification of expenses for over-the-counter drugs under certain accounts and arrangements
HSAs
Subparagraph (A) of section 223(d)(2) of the Internal Revenue Code of 1986 is amended by striking the last sentence.
Archer MSAs
Subparagraph (A) of section 220(d)(2) of such Code is amended by striking the last sentence.
Health flexible spending arrangements and health reimbursement arrangements
Section 106 of such Code is amended by striking subsection (f).
Effective date
The amendments made by this section shall apply to expenses incurred after December 31, 2012.
Taxable distributions of unused balances under health flexible spending arrangements
In general
Section 125 of the Internal Revenue Code of 1986 is amended by redesignating subsections (k) and (l) as subsections (l) and (m), respectively, and by inserting after subsection (j) the following new subsection:
Taxable distributions of unused balances under health flexible spending arrangements
In general
For purposes of this section and sections 105(b) and 106, a plan or other arrangement which (but for any qualified distribution) would be a health flexible spending arrangement shall not fail to be treated as a cafeteria plan or health flexible spending arrangement (and shall not fail to be treated as an accident or health plan) merely because such arrangement provides for qualified distributions.
Qualified distributions
For purposes of this subsection, the term
qualified distribution
means any distribution to an individual
under the arrangement referred to in paragraph (1) with respect to any plan
year if—
such distribution is made after the last date on which requests for reimbursement under such arrangement for such plan year may be made and not later than the end of the 7th month following the close of such plan year, and
such distribution does not exceed the lesser of—
$500, or
the excess of—
the salary reduction contributions made under such arrangement for such plan year, over
the reimbursements for expenses incurred for medical care made under such arrangement for such plan year.
Tax treatment of qualified distributions
Qualified distributions shall be includible in the gross income of the employee in the taxable year in which distributed and shall be taken into account as wages or compensation under the applicable provisions of subtitle C when so distributed.
Coordination with qualified reservist distributions
A qualified reservist distribution (as defined in subsection (h)(2)) shall not be treated as a qualified distribution and shall not be taken into account in applying the limitation of paragraph (2)(B)(i).
.
Conforming amendment
Paragraph (1) of section 409A(d) of such Code is
amended by striking and
at the end of subparagraph (A), by
striking the period at the end of subparagraph (B) and inserting ,
and
, and by adding at the end the following new subparagraph:
a health flexible spending arrangement to which subsection (h) or (k) of section 125 applies.
.
Effective Date
The amendments made by this section shall apply to plan years beginning after December 31, 2012.
Recapture of overpayments resulting from certain federally-subsidized health insurance
In general
Paragraph (2) of section 36B(f) of the Internal Revenue Code of 1986 is amended by striking subparagraph (B).
Conforming amendment
So much of paragraph (2) of section 36B(f) of such
Code, as amended by subsection (a), as precedes advance payments
is amended to read as follows:
Excess advance payments
If the
.
Effective date
The amendments made by this section shall apply to taxable years ending after December 31, 2013.
Passed the House of Representatives June 7, 2012.
Karen L. Haas,
Clerk
June 12, 2012
Read the second time and placed on the calendar