H.R. 3006 — Introduced in House

I 114th CONGRESS 1st Session H. R. 3006 IN THE HOUSE OF REPRESENTATIVES July 9, 2015 Mr. Fleming introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to improve health savings accounts, and for other purposes. 1. Short title, etc (a) Short title This Act may be cited as the Helping Save Americans’ Health Care Choices Act of 2015. (b) Table of sections The table of sections for this Act is as follows: Sec. 1. Short title, etc. Sec. 2. Elimination of requirement that coverage must be under a high deductible health plan. Sec. 3. Increase the maximum contribution limit to an HSA. Sec. 4. Allow both spouses to make catch-up contributions to the same HSA account. Sec. 5. HSA funds may be used for health insurance premiums. Sec. 6. Increased portability of health savings accounts. Sec. 7. Certain physician fees to be treated as medical care. Sec. 8. Special rule for certain medical expenses incurred before establishment of account. Sec. 9. Medicare recipients made eligible for HSAs. Sec. 10. FSA funds may be used for long-term care insurance premiums. Sec. 11. Repeal of limitation on deductions making non-prescription drugs non-qualifying distributions from tax-preferred accounts. Sec. 12. Repeal of additional tax from distributions from HSAs and MSAs. Sec. 13. Repeal of limitation on health flexible spending arrangements under cafeteria plans. 2. Elimination of requirement that coverage must be under a high deductible health plan (a) In general Section 223(c) of the Internal Revenue Code of 1986 is amended by striking paragraphs (1) and (2) and inserting the following new paragraphs: (1) Eligible individual The term eligible individual means, with respect to any month, any individual if such individual is covered under a eligible health plan as of the 1st day of such month. (2) Eligible health plan The term eligible health plan means any health plan (including membership in a health care sharing ministry as defined in section 5000A(d)(2)(B)) other than coverage consisting solely of excepted benefits as defined in section 9832(c). . (b) Conforming amendments (1) In general The following sections of the Internal Revenue Code of 1986 are each amended by striking high deductible health plan each place it appears, as the case may be, and inserting eligible health plan: (A) Section 26(b)(2)(S). (B) Paragraphs (3) and (5)(B)(ii) of section 106(e). (C) Section 223. (D) Section 408(d)(9). (2) Special rules With respect to the amendments made by this section, the matter being inserted shall bear the same case, number, font, and font size as the matter being replaced. (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 3. Increase the maximum contribution limit to an HSA (a) Self-Only coverage Section 223(b)(2)(A) of the Internal Revenue Code of 1986 is amended by striking $2,250 and inserting $6,450. (b) Family coverage Section 223(b)(2)(B) of such Code is amended by striking $4,500 and inserting $12,900. (c) Inflation adjustment Section 223(g)(1) of such Code is amended— (1) by striking subsections (b)(2) and (c)(2)(A) and inserting subsection (b)(2), and (2) by amending subparagraph (B) thereof to read as follows: (B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins determined by substituting calendar year 2014 for calendar year 1992 in subparagraph (B) thereof. . (d) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 4. Allow both spouses to make catch-up contributions to the same HSA account (a) In General Section 223(b)(3) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph: (C) Special rule where both spouses are eligible individuals with 1 account If— (i) an individual and the individual’s spouse have both attained age 55 before the close of the taxable year, and (ii) the spouse is not an account beneficiary of a health savings account as of the close of such year, the additional contribution amount shall be 200 percent of the amount otherwise determined under subparagraph (B). . (b) Effective Date The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 5. HSA funds may be used for health insurance premiums (a) In general Section 223(d)(2) of the Internal Revenue Code of 1986 is amended by striking subparagraphs (B) and (C). (b) Effective Date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 6. Increased portability of health savings accounts (a) Treatment after death of account beneficiary Section 223(f)(8)(A) of the Internal Revenue Code of 1986 is amended to read as follows: (A) Treatment if designated beneficiary is family member If a surviving spouse or lineal descendant of the spouse or the account beneficiary acquires the account beneficiary’s interest in a health savings account by reason of being the designated beneficiary of such account at the death of the account beneficiary, such health savings account shall be treated as if the designated beneficiary were the account beneficiary. . (b) Qualified medical expenses So much of subparagraph (A) of section 223(d)(2) of the Internal Revenue Code of 1986 as precedes Such term is amended to read as follows: (A) In general The term qualified medical expenses means amounts paid for medical care (as defined in section 213(d)), but only to the extent such amounts are not compensated for by insurance or otherwise. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 7. Certain physician fees to be treated as medical care (a) In General Section 213(d) of the Internal Revenue Code of 1986 is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph: (4) Pre-paid physician fees The term medical care shall include amounts paid by patients to their primary physician in advance for the right to receive medical services on an as-needed basis. . (b) Effective Date The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 8. Special rule for certain medical expenses incurred before establishment of account (a) In general Section 223(d) of the Internal Revenue Code of 1986, as amended by the preceding provisions of this Act, is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph: (5) Treatment of account established before tax return due for tax year For purposes of this section, if, before the time prescribed by law for filing the return of tax for a taxable year (not including extensions thereof), a taxpayer— (A) establishes a health savings account, (B) makes contributions to a health savings account on account of such taxable year, or (C) makes payments or distributions from a health savings account for such taxable year, the health savings account shall be deemed to be established on the last day of such taxable year and such contributions and distributions shall be deemed to have been made on account of such taxable year if the taxpayer elects the application of this paragraph for such taxable year. . (b) Conforming amendment Section 223(d)(6) of such Code, as redesignated by subsection (a), is amended by striking subparagraph (B) and redesignating subparagraphs (C) through (E) as subparagraphs (B) through (D), respectively. (c) Effective date The amendments made by this section shall apply with respect to health savings accounts established, and contributions to and distributions from health savings accounts after, the date of the enactment of this Act. 9. Medicare recipients made eligible for HSAs (a) Medicare recipients may contribute to HSAs Section 223(b) of the Internal Revenue Code of 1986 is amended by striking paragraph (7). (b) Medicare beneficiaries participating in medicare advantage MSA may contribute their own money to their MSA Section 138(b) of such Code is amended by striking paragraph (2) and by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively. (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 10. FSA funds may be used for long-term care insurance premiums (a) In general Subsection (c) of section 106 of the Internal Revenue Code of 1986 is amended by redesignating paragraph (2) as paragraph (3) and by amending so much of such subsection as precedes such paragraph (3) to read as follows: (c) Long-Term care benefits provided through flexible spending arrangements (1) In general Gross income of an employee shall not include employer-provided coverage for qualified long-term care services (as defined in section 7702B(c)) to the extent that such coverage is provided through a flexible spending or similar arrangement. (2) Premiums for long-term care Qualified medical expenses for which reimbursement may be made by distributions from a flexible spending arrangement shall include amounts paid for long-term care coverage. . (b) Effective date The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 11. Repeal of limitation on deductions making non-prescription drugs non-qualifying distributions from tax-preferred accounts (a) HSAs Section 223(d)(2)(A) of the Internal Revenue Code of 1986 is amended by striking the last sentence. (b) Archer MSAs Section 220(d)(2)(A) of such Code is amended by striking the last sentence. (c) Health flexible spending arrangements and health reimbursement arrangements Section 106 of such Code is amended by striking subsection (f). (d) Effective dates (1) Distributions from savings accounts The amendments made by subsections (a) and (b) shall apply to amounts paid with respect to taxable years beginning after the date of the enactment of this Act. (2) Reimbursements The amendment made by subsection (c) shall apply to expenses incurred with respect to taxable years beginning after the date of the enactment of this Act. 12. Repeal of additional tax from distributions from HSAs and MSAs (a) HSAs Section 223(f)(4)(A) of the Internal Revenue Code of 1986 is amended by striking 20 percent and inserting 10 percent. (b) Archer MSAs Section 220(f)(4)(A) of such Code is amended by striking 20 percent and inserting 15 percent. (c) Effective date The amendments made by this section shall apply to distributions made after the date of the enactment of this Act. 13. Repeal of limitation on health flexible spending arrangements under cafeteria plans (a) In general Section 125 of the Internal Revenue Code of 1986 is amended— (1) by striking subsection (i), and (2) by redesignating subsections (j), (k), and (l) as subsections (i), (j), and (k), respectively. (b) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.