PRINTER'S NO. 1473
No. 1287 Session of 1995
INTRODUCED BY MICOZZIE, MELIO, PITTS, LYNCH, FLEAGLE,
HUTCHINSON, SCHRODER, GODSHALL, MILLER, READSHAW, HERSHEY,
HERMAN, HANNA, STISH, LEH, ARMSTRONG, L. I. COHEN, WAUGH,
SATHER, BAKER, BUNT, STAIRS, FLICK, DEMPSEY, SEMMEL, REINARD,
RUBLEY, YOUNGBLOOD, BROWN, O'BRIEN, E. Z. TAYLOR, ROHRER,
HENNESSEY, J. TAYLOR, CARN, RAYMOND, ADOLPH, TRICH AND BARD,
MARCH 22, 1995
REFERRED TO COMMITTEE ON FINANCE, MARCH 22, 1995
AN ACT
1 Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2 act relating to tax reform and State taxation by codifying
3 and enumerating certain subjects of taxation and imposing
4 taxes thereon; providing procedures for the payment,
5 collection, administration and enforcement thereof; providing
6 for tax credits in certain cases; conferring powers and
7 imposing duties upon the Department of Revenue, certain
8 employers, fiduciaries, individuals, persons, corporations
9 and other entities; prescribing crimes, offenses and
10 penalties," further defining "income" for personal income tax
11 purposes.
12 The General Assembly finds as follows:
13 (1) Health care spending has increased dramatically in
14 recent years.
15 (2) Basic health insurance coverage is necessary to provide
16 the citizens of this Commonwealth with access to quality health
17 care and to guard against catastrophic financial loss.
18 (3) Some 925,000 Pennsylvanians are without health insurance
19 coverage, and the majority of the uninsured cannot afford to
20 purchase health insurance.
1 (4) A major concern facing many employed Pennsylvanians is
2 the potential loss of health care benefits should they change or
3 lose their jobs.
4 (5) A major cause of these problems is current Federal and
5 State tax policy, which is discriminatory in application and
6 regressive in effect as it applies to the health care delivery
7 and financing system.
8 (6) The Commonwealth and the Federal Government provide full
9 tax deductions for corporate-sponsored health care plans, yet
10 self-employed business owners who do not operate in corporate
11 form and individuals who purchase health insurance must do so
12 with after-tax dollars, which increases the net cost of health
13 insurance.
14 (7) To alleviate this discriminatory practice the Tax Reform
15 Code is amended to provide tax deductibility for self-employed
16 business owners who do not operate in corporate form and other
17 individuals on medical expenditures and health insurance
18 premiums for the person, the person's spouse or the person's
19 dependents.
20 (8) By correcting this inequity many uninsured
21 Pennsylvanians will purchase health insurance which will in turn
22 reduce cost-shifting in the marketplace.
23 The General Assembly of the Commonwealth of Pennsylvania
24 hereby enacts as follows:
25 Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
26 the Tax Reform Code of 1971, is amended by adding a section to
27 read:
28 Section 304.1. Special Tax Provisions for Health Care
29 Expenses.--As used in this article the term "income" shall not
30 include amounts paid by the taxpayer for expenses which were
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1 incurred for medical care for the taxpayer, the taxpayer's
2 spouse or a dependent and which were not reimbursed by insurance
3 or otherwise. The term "income" shall also not include amounts
4 paid by the taxpayer for insurance covering medical care for the
5 taxpayer, the taxpayer's spouse or dependent or the taxpayer's
6 employees, where the taxpayer owns a business not operating in
7 the corporate form. As used in this section, the term "medical
8 care" shall mean amounts paid for the diagnosis, cure,
9 mitigation, treatment or prevention of diseases, or for the
10 purpose of affecting any structure or junction of the body.
11 Section 2. This act shall take effect in 60 days.
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