110 STAT. 2048 PUBLIC LAW 104-191—AUG. 21, 1996 "(C) PENALTY FOR FAILURE TO FILE REPORT. —The penalty provided in section 6693(a) shall apply to any report required by this paragraph, except that— "(i) such section shall be applied by substituting '$25' for '$50', and "(ii) the maximum penalty imposed on any trustee shall not exceed $5,000. "(D) AGGREGATION OF ACCOUNTS.^TO the extent practicable, in determining the number of medical savings accounts on the basis of the reports under this paragraph, all medical savings accounts of an individual shall be treated as 1 account and all accoiuits of individuals who are married to each other shall be treated as 1 account. "(5) DATE OF MAKING DETERMINATIONS. —Any determination under this subsection that a calendar year is a cut-off year shall be made by the Secretary and shall be published not later than October 1 of such year.". (b) DEDUCTION ALLOWED WHETHER OR NOT INDIVIDUAL ITEMIZES OTHER DEDUCTIONS.—Subsection (a) of section 62 is amended by inserting after paragraph (15) the following new paragraph: "(16) MEDICAL SAVINGS ACCOUNTS.—The deduction allowed by section 220.". (c) EXCLUSIONS FOR EMPLOYER CONTRIBUTIONS TO MEDICAL SAVINGS ACCOUNTS.— (1) EXCLUSION FROM INCOME TAX.— The text of section 106 (relating to contributions by employer to accident and health plans) is amended to read as follows: "(a) GENERAL RULE. — Except as otherwise provided in this section, gross income of an employee does not include employer-provided coverage under an accident or health plan. " (b) CONTRIBUTIONS TO MEDICAL SAVINGS ACCOUNTS. — "(1) IN GENERAL.— In the case of an employee who is em eligible individual, amounts contributed by such employee's employer to any medical savings account of such employee shall be treated as employer-provided coverage for medical expenses under an accident or health plan to the extent such amounts do not exceed the limitation under section 220(b)(1) (determined without regard to this subsection) which is applicable to such employee for such taxable year. " (2) No CONSTRUCTIVE RECEIPT.— No amount shall be included in the gross income of any employee solely because the employee may choose between the contributions referred to in paragraph (1) and employer contributions to another health plan of the employer. "(3) SPECIAL RULE FOR DEDUCTION OF EMPLOYER CONTRIBU- TIONS.—Any employer contribution to a medical savings account, if otherwise allowable as a deduction under this chapter, shall be allowed only for the taxable year in which paid. " (4) EMPLOYER MSA CONTRIBUTIONS REQUIRED TO BE SHOWN ON RETURN. —Every individual required to file a return under section 6012 for the teixable year shall include on such return the aggregate amount contributed by employers to the medical savings accoiuits of such individual or such individual's spouse for such taxable year. " (5) MSA CONTRIBUTIONS NOT PART OF COBRA COVERAGE.— Paragraph (1) shall not apply for purposes of section 4980B.