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.

Amends the Internal Revenue Code to allow a bona fide association (an association which has been actively in existence for at least five years and has been formed and maintained in good faith for purposes other than obtaining insurance) to maintain an additional reserve fund for medical benefits plans not to exceed 35 percent of the sum of certain direct costs and changes in claims incurred.

[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3599 Introduced in House (IH)]







109th CONGRESS
  1st Session
                                H. R. 3599

 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.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 28, 2005

Mr. Ryan of Wisconsin introduced the following bill; which was referred 
                   to the Committee on Ways and Means

_______________________________________________________________________

                                 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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. ALLOWANCE OF RESERVE FOR MEDICAL BENEFITS OF PLANS SPONSORED 
              BY BONA FIDE ASSOCIATIONS.

    (a) 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:
            ``(6) Additional reserve for medical benefits of bona fide 
        association plans.--
                    ``(A) 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--
                            ``(i) the qualified direct costs, and
                            ``(ii) the change in claims incurred, but 
                        unpaid, for such taxable year with respect to 
                        medical benefits (other than post-retirement 
                        medical benefits).
                    ``(B) 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)).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years ending after December 31, 2004.
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