1. Short title This Act may be cited as the Senior Health Planning Account Act . 2. Senior health planning account (a) In general Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139G the following new section: 139H. Senior health planning account (a) Exclusion of contributions of gain from sales of life insurance contracts The amount of gain from the sale or assignment of a life insurance contract of a taxpayer shall be reduced (but not below zero) by the amount of contributions to a senior health planning account made by such taxpayer during the 30-day period beginning on the date of such sale or assignment. (b) Tax Treatment of Senior Health Planning Account (1) In general A senior health planning account is exempt from taxation under this subtitle unless such account has ceased to be a senior health planning account. Notwithstanding the preceding sentence, any such account is subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable, etc. organizations). (2) Account terminations Rules similar to the rules of paragraphs (2) and (4) of section 408(e) shall apply to senior health planning accounts, and any amount treated as distributed under such rules shall be treated as not used to pay qualified health care expenses. (3) Tax treatment of distributions (A) Amounts used for qualified health care expenses Any amount paid or distributed out of a senior health planning account which is used exclusively to pay qualified health care expenses of the account beneficiary or the account beneficiary’s spouse shall not be includible in gross income. (B) Inclusion of amounts not used for qualified health care expenses Any amount paid or distributed out of a senior health planning account which is not used to pay the qualified health care expenses of the account beneficiary or the account beneficiary’s spouse shall be included in the gross income of such beneficiary. (C) Additional tax on distributions