§843. Allowance of reserve for medical benefits of plans sponsored by bona fide associations

Pension Protection Act of 2006

Title VIII Pension Related Revenue Provisions

Subtitle D Health and Medical Benefits

(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 beginning after December 31, 2006.