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Health | Politics
Health reform bill includes tribal tax exemption


Sen. Max Baucus (D-Montana), the chairman of the Senate Finance Committee, released changes to America's Healthy Future Act that address a tax issue affecting tribal health benefits.

The amendment excludes tribal health benefits from being treated as income tax. The Internal Revenue Service has considered such benefits to be taxable, an issue that was the subject of a Senate Indian Affairs Committee hearing on September 18.

"The exclusion applies to the value of: (1) health services or benefits provided or purchased by the Indian Health Service ("IHS"), either directly or indirectly, through a grant to or a contract or compact with an Indian tribe or tribal organization or through programs of third parties funded by the IHS; (2) medical care services (in the form of provided or purchased medical care services, accident or health insurance or an arrangement having the same effect, or amounts paid directly or indirectly, to reimburse the member for expenses incurred for medical care) provided by an Indian tribe or tribal organization to a member of an Indian tribe, including the member's spouse or dependents; (3) accident or health plan coverage (or an arrangement having the same effect) provided by an Indian tribe or tribal organization for medical care to a member of an Indian tribe and the member's spouse or dependents; and (4) any other medical care provided by an Indian tribe that supplements, replaces, or substitutes for the programs and services provided by the Federal government to Indian tribes or Indians," according to the chairman's mark that was released by the Senate Finance Committee.

The amendment is prospective and does not address prior tax assessments on tribal members, the committee said. The amendment was proposed by Sen. Kent Conrad (D-North Dakota).

Other documents about America's Healthy Future Act can be found at http://finance.senate.gov/sitepages/baucus.htm.

Get the Story:
Press Release: BAUCUS MODIFIES CHAIRMAN’S MARK TO IMPROVE HEALTH CARE AFFORDABILITY, MAINTAIN DEFICIT REDUCTIONS (Sen. Baucus 9/22)

Committee Hearing:
OVERSIGHT HEARING to examine the federal tax treatment of health care benefits provided by tribal governments to their citizens (September 17, 2009)

Related Stories:
Video: Senate Indian Affairs Committee hearing (9/18)
Mark Trahant: Taxation of tribal health benefits (9/21)
Senate Indian Affairs hearing moved to Friday (9/17)
Witness list for hearing on tribes and tax issue (9/16)
Indian Affairs Committee hearing on tax issue (9/14)