PUBLIC LAW 104-191—AUG. 21, 1996
110 STAT. 2053
science to conduct a comprehensive study regarding the effects
of medical savings accounts in the small group market on—
(1) selection, including adverse selection,
(2) health costs, including any impact on premiums of
individuals with comprehensive coverage,
(3) use of preventive care,
(4) consumer choice,
(5) the scope of coverage of high deductible plans purchased
in conjunction with such accounts, and
(6) other relevant items.
A report on the results of the study conducted under this subsection Reports.
shall be submitted to the Congress no later than January 1, 1999.
Subtitle B—Inc|rease in Deduction for
Health Insurance Costs of Self-Employed
Individuals
SEC. 311. INCREASE IN DEDUCTION FOR HEALTH INSURANCE COSTS
OF SELF-EMPLOYED INDIVIDUALS.
(a) IN GENERAL. — Paragraph (1) of section 162(1) is amended
to read as follows:
"(1) ALLOWANCE OF DEDUCTION. —
"(A) IN GENERAL. —In the case of an individual who
is an employee within the meeining of section 401(c)(1),
there shall be allowed as a deduction under this section
an amount equal to the applicable percentage of the amount
paid during the taxable year for insurance which constitutes medical care for the taxpayer, his spouse, and
dependents.
"(B) APPLICABLE PERCENTAGE.— For purposes of
subparagraph (A), the applicable percentage shall be determined under the following table:
'Tor taxable years beginning
The applicable percentage is—
in calendar year—
1997
40 percent
1998 through 2002
45 percent
2003
50 percent
2004
60 percent
2005
70 percent
2006 or thereafter
80 percent.".
(b) EXCLUSION FOR AMOUNTS RECEIVED UNDER CERTAIN SELF-
INSURED PLANS. —Paragraph (3) of section 104(a) is amended by
inserting "(or through an arrangement having the effect of accident
or health insurance)" after "health insurance".
(c) EFFECTIVE DATE.—The amendments made by this section 26 USC 104 note.
shall apply to taxable years beginning after December 31, 1996.
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