A bill to amend the Internal Revenue Code of 1986 to clarify the calculation of the reserve allowance for medical benefits of plans sponsored by bona fide associations.

This bill would allow professional and trade associations to increase the amount of money they keep in tax-exempt reserve funds to pay for member health benefits. Specifically, it permits these "bona fide associations" to hold an additional reserve of up to 35 percent of their annual medical costs and claims. For citizens who receive health coverage through an association—such as small business owners or self-employed individuals—this change is intended to provide greater financial stability for their health plans and help protect against sudden spikes in insurance premiums.