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SEC. 105. AMOUNTS RECEIVED UNDER ACCIDENT AND HEALTH
PLANS.
* * * * * * *
(b) Amounts Expended for Medical Care.--
* * * gross income does not include amounts
referred to in subsection (a)[11] if such
amounts are paid, directly or indirectly, to
the taxpayer to reimburse the taxpayer for
expenses incurred by him for the medical care
(as defined in section 213(d)) of the tax-
payer, his spouse, and his dependents
* * *.[12]
Section 106(a) on which petitioners also appear to rely
provides:
SEC. 106. CONTRIBUTIONS BY EMPLOYER TO ACCIDENT AND
HEALTH PLANS.
(a) General Rule.-- Except as otherwise
provided in this section, gross income of an
employee does not include employer-provided
coverage under an accident or health plan.
A contribution by an employer to an accident or health plan
described in section 106 includes a payment that such employer
11Sec. 105(a) provides:
(a) Amounts Attributable to Employer
Contributions.--Except as otherwise provided in this
section, amounts received by an employee through acci-
dent or health insurance for personal injuries or
sickness shall be included in gross income to the
extent such amounts (1) are attributable to contribu-
tions by the employer which were not includible in the
gross income of the employee, or (2) are paid by the
employer.
12For purposes of sec. 105(b), expenses for medical care
include amounts paid as premiums for insurance covering medical
care referred to in sec. 213(d)(1)(A) and (B). Sec.
213(d)(1)(D).
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Last modified: March 27, 2008