,,ii  #aaeth ,,congress  #b;d ,session  
,s4 #cdgc  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,september #ah1
 #bjah ,mr4 ,sasse introduced the       
following bill2 which was read twice and
 referred to the ,committee on ,finance 
,a ,,bill  ,to amend the ,internal      
,revenue ,code of #aihf to expand       
permissible distributions from an       
employee's health flexible spending     
account or health reimbursement         
arrangement to their health savings     
account4  #a4 ,short title ,this ,act   
may be cited as the ,qualified ,health  
,savings ,account ,distribution ,act of 
#bjah4  #b4 ,,fsa and ,,hra terminations
 or conversions to fund ,h,s,as  7a7 ,in
 general ,section #ajf7;e77#b7 of the   
,internal ,revenue ,code of #aihf is    
amended to read as follows3  7#b7       
,qualified ,,hsa distribution ,for      
purposes of this subsection-- 7,a7 ,in  
general ,the term qualified ,,hsa       
distribution means1 with respect to any 
employee1 a distribution from a health  

flexible spending arrangement or health 
reimbursement arrangement of such       
employee directly to a health savings   
account of such employee if--  7i7 such 
distribution is made in connection with 
such employee establishing coverage     
under a high deductible health plan 7as 
defined in section #bbc7;c77#b77 after a
 significant period of not having such  
coverage1 and  7ii7 such arrangement is 
described in section                    
#bbc7;c77#a77;,b77iii7 with respect to  
the portion of the plan year after such 
distribution is made4  7,b7 ,dollar     
limitation ,the aggregate amount of     
distributions from health flexible      
spending arrangements and health        
reimbursement arrangements of any       
employee which may be treated as        
qualified ,,hsa distributions in        
connection with an establishment of     
coverage described in subparagraph      
7,a77i7 shall not exceed an amount equal
 to the sum of--  7i7 the dollar amount 
in effect under section #abe7;i77#a7    

7twice such amount in the case of       
coverage which is described in section  
#bbc7;b77#b77;,b771 plus  7ii7 an amount
 equal to the maximum unused amounts    
remaining at the end of a plan year in a
 health flexible spending arrangement   
which are permitted to be paid or       
reimbursed to plan participants for     
qualified medical expenses incurred     
during the following plan year1 as      
provided in ,internal ,revenue ,service 
,notice #bjac-ga 7as in effect on the   
date of the enactment of the ,qualified 
,health ,savings ,account ,distribution 
,act of #bjah74  4  7b7 ,conversion to  
,,hsa-,compatible arrangement for       
remainder of plan year ,section         
#bbc7;c77#a77;,b77iii7 of such ,code is 
amended to read as follows3  7iii7      
coverage under a health flexible        
spending arrangement or health          
reimbursement arrangement for the       
portion of the plan year after a        
qualified ,,hsa distribution 7as defined
 in section #ajf7;e77#b7 determined     

without regard to subparagraph 7,a77ii7 
thereof7 is made1 if the terms of such  
arrangement which apply for such portion
 of the plan year are such that1 if such
 terms applied for the entire plan year1
 then such arrangement would not be     
taken into account under subparagraph   
7,a77ii7 of this paragraph for such plan
 year1 and  4  7c7 ,inclusion of        
qualified ,,hsa distributions on ,w-#b  
7#a7 ,in general ,section #fjea7;a7 of  
such ,code is amended by striking and at
 the end of paragraph 7#af71 by striking
 the period at the end of paragraph     
7#ag7 and inserting 1 and1 and by       
inserting after paragraph 7#ag7 the     
following new paragraph3  7#ah7 the     
amount of any qualified ,,hsa           
distribution 7as defined in section     
#ajf7;e77#b77 with respect to such      
employee4  4  7#b7 ,conforming amendment
 ,section #fjea7;a77#ab7 of such ,code  
is amended by inserting 7other than any 
qualified ,,hsa distribution1 as defined
 in section #ajf7;e77#b77 before the    

comma at the end4  7d7 ,effective date  
,the amendments made by this section    
shall apply to distributions made after 
,december #ca1 #bjah1 in taxable years  
ending after such date4