A bill to amend the Internal Revenue Code of 1986 to provide a uniform Federal tax treatment for employer-provided health care benefits for retired employees.

Retiree Health Protection Act of 1987 - Amends the Internal Revenue Code to add provisions relating to voluntary retiree health plans.

Permits an income tax deduction for employer contributions to a qualified retiree health care trust. Limits the deduction to the least of: (1) $1,500 (adjusted annually for increases in the medical component of the Consumer Price Index); (2) 25 percent of the participant-employee's compensation; or (3) the amount actuarially determined to be necessary to fund the target account balance for the given employee.

Excludes from the gross income of an individual or spouse: (1) any employer contribution under a qualified voluntary retiree health plan; (2) any earnings on the account of the individual or spouse in such a plan; or (3) receipts of any post-retirement benefit under the plan. Disallows this tax exclusion when: (1) the individual is a participant or beneficiary under more than one qualified plan and does not consolidate the accounts; (2) the plan ceases to be qualified; or (3) the individual assigns any portion of his or her interest in the plan.

Sets forth plan qualification criteria, including requirements that the plan be in writing, provide employee rights that are legally enforceable, and be maintained for the exclusive benefit of employees. Requires, in addition, that: (1) the plan provide only post-retirement medical benefits (after the former employee or employee spouse has attained age 65 or is disabled); (2) benefits be provided only through insurance acquired by the plan, self-insurance under guaranteed renewable contracts, reimbursement of expenses paid by the care recipient, or any combination of these; (3) employees do not contribute to the plan; (4) neither contributions nor benefits discriminate in favor of highly compensated employees; (5) contributions meet the same limitation that is applicable to the permissible tax deduction; (6) the plan meet specified participation, coverage, vesting, distribution, and transfer standards; and (7) a participant or beneficiary may not receive a loan from the plan or exercise control over account assets.

Limits plan holdings of employer securities and employer real property.

Describes conditions to be met by any qualified retiree health care trust that is part of a qualified voluntary retiree health plan.

Preempts all State laws relating to health plans for former employees and their spouses.

Imposes an excise tax, with limited exceptions, on an employer who maintains a qualified plan if any distribution that is not a post-retirement medical benefit is made or if a proper post-retirement medical benefit is provided but is not paid from the separate account of the recipient employee. Fixes the rate for this tax at 100 percent of the improper payment.

Repeals Internal Revenue Code provisions that authorize payment of retiree medical benefits under pension or annuity plans and under welfare benefit plans.