[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7107 Introduced in House (IH)]
<DOC>
117th CONGRESS
2d Session
H. R. 7107
To amend the Internal Revenue Code of 1986 to expand the use of
retirement plan funds to obtain long-term care insurance, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 16, 2022
Mrs. Wagner introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committee on
Education and Labor, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to expand the use of
retirement plan funds to obtain long-term care insurance, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Long-Term Care Affordability Act''.
SEC. 2. LONG-TERM CARE CONTRACTS PURCHASED WITH RETIREMENT PLAN
DISTRIBUTIONS.
(a) In General.--Section 402 of the Internal Revenue Code of 1986
is amended by adding at the end the following new subsection:
``(m) Distributions With Respect to Long-Term Care Insurance.--
``(1) Exclusion.--
``(A) In general.--Gross income of an individual
for the taxable year does not include any distribution
from an eligible retirement plan to the extent that the
aggregate amount of such distributions does not exceed
the amount paid by or assessed to such individual
during the taxable year for or with respect to coverage
described in subparagraph (B) for the individual, the
individual's spouse, or a dependent (as defined in
section 152, determined without regard to subsections
(b)(1), (b)(2), and (d)(1)(B) thereof) of the
individual.
``(B) Coverage described.--Coverage described in
this subparagraph is--
``(i) a qualified long-term care insurance
contract (as defined in section 7702B(b))
covering qualified long-term care services (as
defined in section 7702B(c)), and
``(ii) coverage of the risk that an insured
individual would become a chronically ill
individual (within the meaning of section
101(g)(4)(B)) under a rider or other provision
of a life insurance contract which satisfies
the requirements of section 101(g)(3)
(determined without regard to subparagraph (D)
thereof).
``(2) Limitation.--
``(A) In general.--The amount excluded from gross
income under paragraph (1) for any taxable year shall
not exceed $2,500 with respect to payments for coverage
for any insured individual.
``(B) Exclusion available only to 1 taxpayer.--The
exclusion under paragraph (1) shall be allowed to only
1 taxpayer for any taxable year with respect to any 1
insured individual.
``(C) Adjustment for inflation.--
``(i) In general.--In the case of any
taxable year beginning after December 31, 2021,
the $2,500 amount in subparagraph (A) shall be
increased by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for the calendar year in which
the taxable year begins, determined by
substituting `calendar year 2020' for
`calendar year 2016' in subparagraph
(A)(ii) thereof.
``(ii) Rounding.--If any increase
determined under clause (i) is not a multiple
of $10, such increase shall be rounded to the
nearest multiple of $10.
``(3) Eligible retirement plan.--For purposes of this
subsection, the term `eligible retirement plan' means any plan
which--
``(A) is described in clause (i), (ii), (iv), (v),
or (vi) of subsection (c)(8)(B), or
``(B) is a defined contribution plan described in
clause (iii) of subsection (c)(8)(B).
``(4) Distributions must otherwise be includible.--Rules
similar to the rules of subsection (l)(3) shall apply for
purposes of this subsection.
``(5) Separately stated portions of a contract.--For
purposes of this subsection, the amount taken into account as
paid during the taxable year for coverage described in
paragraph (1)(B)(i) includes premiums paid and charges assessed
during such taxable year for any such coverage which is treated
as a separate contract under section 7702B(e)(1), if such
separate contract is a qualified long-term care insurance
contract (as defined in section 7702B(b)).
``(6) Coordination with other deductions.--The amounts
excluded from gross income under paragraph (1) shall not be
taken into account under section 162(l) or 213.''.
(b) Amounts Treated as Required Minimum Distribution.--Section
401(a)(9) of the Internal Revenue Code of 1986 is amended by adding at
the end the following new subparagraph:
``(J) Treatment of distributions for long-term care
insurance.--For purposes of this title, if a
distribution is required under this paragraph for a
taxable year, any distribution which is excluded from
gross income under section 402(m) for the taxable year
shall be treated as a distribution required under this
paragraph.''.
(c) Conforming Amendments.--
(1) Section 401(k)(2)(B)(i) of the Internal Revenue Code of
1986 is amended by striking ``or'' at the end of subclause (V),
by adding ``or'' at the end of subclause (VI), and by adding at
the end the following new subclause:
``(VII) as provided in section
402(m),''.
(2) Section 403(b)(11) of such Code is amended by striking
``or'' at the end of subparagraph (C), by striking the period
at the end of subparagraph (D) and inserting ``, or'', and by
inserting after subparagraph (D) the following new
subparagraph:
``(E) for distributions to which section 402(m)
applies.''.
(3) Section 457(d)(1)(A) of such Code is amended by
striking ``or'' at the end of clause (iii), by striking the
comma at the end of clause (iv) and inserting ``, or'', and by
adding at the end the following new clause:
``(v) as provided in section 402(m),''.
(d) Reporting.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 of the Internal Revenue Code of 1986 is amended by
adding at the end the following new section:
``SEC. 6050Z. CERTAIN WITHDRAWALS FROM QUALIFIED ARRANGEMENTS FOR LONG-
TERM CARE INSURANCE.
``(a) Requirement of Reporting.--Any issuer of a qualified long-
term care insurance contract (as defined in section 7702B(b)),
including a rider or other provision that is treated as a qualified
long-term care insurance contract under section 7702B(e)(1), or of
coverage described in section 402(m)(1)(B)(ii), shall make a return,
according to forms or regulations prescribed by the Secretary, setting
forth for each insured individual--
``(1) the aggregate amount of premiums and charges paid for
the contract or coverage covering such individual during the
calendar year,
``(2) the name, address, and TIN of the owner of the
contract, if applicable, and
``(3) the name, address, and TIN of the insured under the
contract.
``(b) Statement To Be Furnished to Persons With Respect to Whom
Information Is Required.--Every person required to make a return under
subsection (a) shall furnish to each individual whose name is required
to be set forth in such return a written statement showing--
``(1) the name, address, and phone number of the
information contact of the issuer of the qualified long-term
care insurance contract or coverage described in section
402(m)(1)(B)(ii), and
``(2) the aggregate amount of premiums and charges paid
under the contract or coverage covering the insured individual
during the calendar year.
The written statement required under the preceding sentence shall be
furnished to the individual or individuals on or before January 31 of
the year following the calendar year for which the return required
under subsection (a) was required to be made.
``(c) Contracts or Coverage Covering More Than One Insured.--In the
case of contracts or coverage covering more than one insured, the
return and statement required by subsections (a) and (b) shall identify
only the portion of the premium that is properly allocable to the
insured in respect of whom the return or statement is made.''.
(2) Clerical amendment.--The table of sections for subpart
B of part III of subchapter A of chapter 61 of such Code is
amended by adding after the item relating to section 6050Y the
following new item:
``Sec. 6050Z. Certain withdrawals from qualified arrangements for long-
term care insurance.''.
(e) Effective Date.--The amendment made by this section shall apply
to distributions received after the date of the enactment of this Act.
SEC. 3. INFORMATION ABOUT LONG-TERM CARE INSURANCE.
Section 516 of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1146) is amended--
(1) in the section heading, by inserting ``and
participation in long-term care insurance'' after ``savings'';
(2) in subsection (a), by inserting ``and long-term care
insurance'' after ``income savings'';
(3) in subsection (c)--
(A) in paragraph (1), by striking ``; and'' and
inserting a semicolon;
(B) in paragraph (2), by striking the period and
inserting ``; and''; and
(C) by adding at the end the following:
``(3) a description of long-term care insurance
arrangements, and information regarding matters relevant to
enrolling in such insurance, including--
``(A) a fact sheet for employers, in an easily
accessible format; and
``(B) a fact sheet for workers, in an easily
accessible format.''; and
(4) in subsection (d)--
(A) in the matter preceding paragraph (1), by
inserting ``and long-term care insurance'' before the
period at the end of the first sentence;
(B) in paragraph (3), by adding ``and'' after the
semicolon;
(C) in paragraph (4), by striking ``; and'' and
inserting a period;
(D) by redesignating paragraphs (1) through (4) as
subparagraphs (A) through (D), respectively, and
adjusting the margins accordingly;
(E) by redesignating paragraph (5) as paragraph
(3);
(F) by inserting before subparagraph (A), as so
redesignated, the following:
``(1) With respect to retirement income savings--'';
(G) by inserting before paragraph (3), as so
redesignated by subparagraph (E), the following:
``(2) With respect to long-term care insurance--
``(A) a description in simple terms of the common
types of long-term care insurance available to both
individuals and employers (specifically including small
employers), including information on the tax benefits
of such insurance under the Internal Revenue Code of
1986; and
``(B) materials explaining to employers in simple
terms, the characteristics and operation of the
different long-term care insurance for their workers
and what the basic legal requirements are under this
Act and the Internal Revenue Code of 1986, including
the steps to enroll in such insurance and including
links to the fact sheets described in subsection
(c)(3).''; and
(H) in paragraph (3), as so redesignated by
subparagraph (E)--
(i) by striking ``links to other'' and
inserting ``Links to other''; and
(ii) by inserting ``and long-term care
insurance'' after ``retirement income savings
arrangements''.
<all>
Long-Term Care Affordability Act
#7107 | HR Congress #117
Policy Area: Taxation
Subjects:
Last Action: Referred to the Committee on Ways and Means, and in addition to the Committee on Education and Labor, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned. (3/16/2022)
Bill Text Source: Congress.gov
Summary and Impacts
Original Text