102 STAT. 3488

PUBLIC LAW 100-647—NOV. 10, 1988

42 USC 411.

(31)(A) Section 129(d) of the 1986 Code is amended—

(i) by striking out the last sentence of paragraph (3), and
(ii) by inserting at the end thereof the following new
paragraph:

"(8) EXCLUDED EMPLOYEES.—For purposes of paragraphs (2),
(3), and (7), there shall be excluded from consideration employ-
ees who are excluded from consideration under section 89(h)."
(B) Sections 117(d)(4), 120(c)(2), 127(b)(2), 132(h)(l), and 505(b)(2)
of the 1986 Code are each amended—

(i) by striking out "may" the first place it appears and
inserting in lieu thereof "shall", and

(ii) by striking out "may be" the second place it appears
and inserting in lieu thereof "are".

(32) Section 505(b) of the 1986 Code is amended by adding at
the end thereof the following new paragraph:

"(7) $200,000 COMPENSATION LIMIT.—A plan shall not be treat-
ed as meeting the requirements of this subsection unless under
the plan the annual compensation of each employee taken into
account for any year does not exceed $200,000. The Secretary
shall adjust the $200,000 amount at the same time and in the
same manner as under section 415(d)."

(33) Section 3401(a) of the 1986 Code is amended by inserting
"or" at the end of paragraph (18), by striking out paragraph
(19), and by redesignating paragraph (20) as paragraph (19).

(34) Section 89(1)(2) of the 1986 Code is amended by striking
out "6652(1)" and inserting in lieu thereof "6652(k)".

(b) AMENDMENTS RELATED TO SECTION 1161 OF THE REFORM ACT.—

(1) Section 162(m) of the 1986 Code (relating to special rules
for health insurance costs of -self-employed individuals) is
amended by redesignating paragraph (4) as paragraph (5) and
by inserting after paragraph (3) the following new paragraph:

"(4) DEDUCTION NOT ALLOWED FOR SELF-EMPLOYMENT TAX PUR-
POSES.—The deduction allowable by reason of this subsection
shall not be taken into account in determining an individual's
net earnings from self-employment (within the meaning of sec-
tion 1402(a)) for purposes of chapter 2."

(2) Section 162(m) of the 1986 Code (relating to cross reference)
as redesignated by section 1161(a) of the Reform Act, is redesig-
nated as subsection (n).

(3) Section 162(m)(2)(A) of the 1986 Code is amended by insert-
ing: "derived by the taxpayer from the trade or business with
respect to which the plan providing the medical care coverage is
established" after "401(c))".

(4) Section 211(a) of the Social Security Act is amended by
inserting after paragraph (13) the following new paragraph:

"(14) The deduction under section 162(m) (relating to health
insurance costs of self-employed individuals) shall not be al-
lowed."

(c) AMENDMENTS RELATED TO SECTION 1163 OF THE REFORM ACT.—

(1) Paragraph (8) of section 129(e) of the 1986 Code (relating to
treatment of onsite facilities) is amended—

(A) by inserting "maintained by an employer" after
"onsite facility",

(B) by inserting "of dependent care assistance provided to
an employee" after "the amount",

(C) by inserting "of the facility by a dependent of the
employee" after "utilization" in subparagraph (A), and