Middle Class Health Benefits Tax Repeal Act of 2019

II 116TH CONGRESS 1ST SESSION S. 684 To amend the Internal Revenue Code of 1986 to repeal the excise tax on high-cost employer-sponsored health coverage. IN THE SENATE OF THE UNITED STATES MARCH 6, 2019 Mr. HEINRICH (for himself, Mr. ROUNDS, Mrs. SHAHEEN, Mr. WICKER, Mr. PORTMAN, Mr. SULLIVAN, Ms. MURKOWSKI, Mr. GARDNER, Mr. BOOZ- MAN, Ms. HASSAN, Ms. DUCKWORTH, Ms. STABENOW, Mr. SCOTT of South Carolina, Mr. PETERS, Mr. INHOFE, Ms. ERNST, Mr. MURPHY, Ms. CORTEZ MASTO, Mr. CASEY, Mr. BLUMENTHAL, Mr. YOUNG, Mrs. FISCHER, Ms. HARRIS, and Mr. BROWN) 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 repeal the excise tax on high-cost employer-sponsored health coverage. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Middle Class Health 4 Benefits Tax Repeal Act of 2019’’. 5 VerDate Sep 11 2014 22:24 Mar 25, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S684.IS S684 pbinns on DSK79D2C42PROD with BILLS 2 •S 684 IS SEC. 2. REPEAL OF EXCISE TAX ON HIGH COST EMPLOYER- 1 SPONSORED HEALTH COVERAGE. 2 (a) IN GENERAL.—Chapter 43 of the Internal Rev- 3 enue Code of 1986 is amended by striking section 4980I. 4 (b) CONFORMING AMENDMENTS.— 5 (1) Section 6051 of such Code is amended— 6 (A) in paragraph (14) of subsection (a), by 7 striking ‘‘section 4980I(d)(1)’’ and inserting 8 ‘‘subsection (g)’’, and 9 (B) by adding at the end the following: 10 ‘‘(g) APPLICABLE EMPLOYER-SPONSORED COV- 11 ERAGE.—For purposes of subsection (a)(14)— 12 ‘‘(1) IN GENERAL.—The term ‘applicable em- 13 ployer-sponsored coverage’ means, with respect to 14 any employee, coverage under any group health plan 15 made available to the employee by an employer 16 which is excludable from the employee’s gross in- 17 come under section 106, or would be so excludable 18 if it were employer-provided coverage (within the 19 meaning of such section 106). 20 ‘‘(2) EXCEPTIONS.—The term ‘applicable em- 21 ployer-sponsored coverage’ shall not include— 22 ‘‘(A) any coverage (whether through insur- 23 ance or otherwise) described in section 24 9832(c)(1) (other than subparagraph (G) there- 25 of) or for long-term care, or 26 VerDate Sep 11 2014 22:24 Mar 25, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S684.IS S684 pbinns on DSK79D2C42PROD with BILLS 3 •S 684 IS ‘‘(B) any coverage under a separate policy, 1 certificate, or contract of insurance which pro- 2 vides benefits substantially all of which are for 3 treatment of the mouth (including any organ or 4 structure within the mouth) or for treatment of 5 the eye, or 6 ‘‘(C) any coverage described in section 7 9832(c)(3) the payment for which is not exclud- 8 able from gross income and for which a deduc- 9 tion under section 162(l) is not allowable. 10 ‘‘(3) COVERAGE INCLUDES EMPLOYEE PAID 11 PORTION.—Coverage shall be treated as applicable 12 employer-sponsored coverage without regard to 13 whether the employer or employee pays for the cov- 14 erage. 15 ‘‘(4) GOVERNMENTAL PLANS INCLUDED.—Ap- 16 plicable employer-sponsored coverage shall include 17 coverage under any group health plan established 18 and maintained primarily for its civilian employees 19 by the Government of the United States, by the gov- 20 ernment of any State or political subdivision thereof, 21 or by any agency or instrumentality of any such gov- 22 ernment. 23 ‘‘(5) COST OF COVERAGE.— 24 VerDate Sep 11 2014 22:24 Mar 25, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S684.IS S684 pbinns on DSK79D2C42PROD with BILLS 4 •S 684 IS ‘‘(A) HEALTH FSAS.—In the case of appli- 1 cable employer-sponsored coverage consisting of 2 coverage under a flexible spending arrangement 3 (as defined in section 106(c)(2)), the cost of the 4 coverage shall be equal to the amount deter- 5 mined under rules similar to the rules of section 6 4980B(f)(4) with respect to any reimbursement 7 under the arrangement reduced by the contribu- 8 tions described in subsection (a)(14)(B). 9 ‘‘(B) ARCHER MSAS AND HSAS.—In the 10 case of applicable employer-sponsored coverage 11 consisting of coverage under an arrangement 12 under which the employer makes contributions 13 described in subsection (b) or (d) of section 14 106, the cost of the coverage shall be equal to 15 the amount of employer contributions under the 16 arrangement. 17 ‘‘(C) ALLOCATION ON A MONTHLY 18 BASIS.—If cost is determined on other than a 19 monthly basis, the cost shall be allocated to 20 months in a taxable period on such basis as the 21 Secretary may prescribe.’’. 22 (2) Section 9831(d)(1) of such Code is amend- 23 ed by striking ‘‘except as provided in section 24 4980I(f)(4) and’’. 25 VerDate Sep 11 2014 22:24 Mar 25, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S684.IS S684 pbinns on DSK79D2C42PROD with BILLS 5 •S 684 IS (3) The table of sections for chapter 43 of such 1 Code is amended by striking the item relating to sec- 2 tion 4980I. 3 (c) EFFECTIVE DATE.—The amendments made by 4 this section shall apply to taxable years beginning after 5 December 31, 2019. 6 Æ VerDate Sep 11 2014 22:24 Mar 25, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\S684.IS S684 pbinns on DSK79D2C42PROD with BILLS