ALLOWANCE OF RESERVE FOR MEDICAL BENEFITS OF PLANS SPONSORED BY BONA FIDE ASSOCIATIONS.

SEC. 843. ALLOWANCE OF RESERVE FOR MEDICAL BENEFITS OF PLANS SPONSORED BY BONA FIDE ASSOCIATIONS.(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.