,i  #aaf? ,,congress  #b;d ,session  ,h4
 ,r4 #hdgc  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,octob] #a1 #bjbj,mr4 
,gonzalez ( ,ohio 7= himself & ,mr4     
,we/]man7 introduc$ ! foll[+ bill2 :i* 0
 ref]r$ to ! ,committee on ,ways &      
,means1 & 9 addition to ! ,committee on 
,en]gy & ,comm]ce1 = a p]iod to be      
subsequ5tly det]m9$ by ! ,speak]1 9 ea* 
case = consid]ation ( su* provisions z  
fall )9 ! jurisdiction ( ! committee    
conc]n$  ,a ,,bill  ,to am5d ! ,int]nal 
,rev5ue ,code ( #aihf to consolidate    
heal? acc\nts into ,m$isave ,acc\nts1 & 
= o!r purposes4  #a4 ,%ort title ,?is   
,act may be cit$ z ! ,family ,fir/      
,m$isave ,emp[]m5t ,act4  #b4 ,m$isave  
,acc\nts  7a7 ,9 g5]al ,"p ,,viii (     
sub*apt] ,f ( *apt] #a ( ! ,int]nal     
,rev5ue ,code ( #aihf is am5d$ by add+  
at ! end ! foll[+ new section3  #ecj;,a4
 ,m$isave ,acc\nts  7a7 ,m$isave acc\nt 
,= purposes ( ?is section-- 7#a7 ,9     
g5]al ,! t]m ,m$isave acc\nt means a    
tru/ creat$ or organiz$ 9 ! ,unit$      

,/ates z a ,m$isave acc\nt exclusively =
 ! purpose ( pay+ ! qualifi$ m$ical     
exp5ses ( ! acc\nt b5efici>y1 b only if 
! writt5 gov]n+ in/rum5t creat+ ! tru/  
meets ! foll[+ requirem5ts3 7,a7 ,except
 9 ! case ( a rollov] contribution      
describ$ 9 subp>agraph 7,a7 or 7,b7 (   
subsection 7e77#e71 no contribution w be
 accept$-- 7i7 unless x is 9 ca%1  7ii7 
to ! ext5t su* contribution1 :5 add$ to 
previ\s contributions to ! tru/ = !     
cal5d> ye>1 exce$s ! limitation am\nt   
specifi$ 9 subsection 7b77#a71 or  7iii7
 to ! ext5t su* contribution1 :5 add$ to
 ! balance ( ! acc\nt1 exce$s !         
limitation am\nt specifi$ 9 subsection  
7b77#b74  7,b7 ,! tru/ee is a bank 7z   
def9$ 9 section #djh7n771 an insurance  
company 7z def9$ 9 section #haf71 or    
ano!r p]son :o demon/rates to !         
satisfaction ( ! ,secret>y t ! mann] 9  
:i* su* p]son w adm9i/] ! tru/ w be     
consi/5t ) ! requirem5ts ( ?is section4 
7,c7 ,no "p ( ! tru/ assets w be inve/$ 
9 life insurance contracts4  7,d7 ,!    

assets ( ! tru/ w n be comm+l$ ) o!r    
prop]ty except 9 a common tru/ fund or  
common inve/m5t fund4  7,e7 ,! int]e/ ( 
an individual 9 ! balance 9 8 acc\nt is 
non=feitable4  7#b7 ,qualifi$ m$ical    
exp5ses  7,a7 ,9 g5]al ,! t]m qualifi$  
m$ical exp5ses means1 ) respect to an   
acc\nt b5efici>y1 am\nts paid by su*    
b5efici>y = m$ical c>e1 b only to !     
ext5t su* am\nts are n comp5sat$ = by   
insurance or o!rwise-- 7i7 =-- 7,i7 su* 
individual1  7,,ii7 ! sp\se ( su*       
individual1  7,,iii7 any dep5d5t 7z     
def9$ 9 section #aeb1 det]m9$ )\t reg>d 
to subsections 7b77#a71 7b77#b71 &      
7d77#a77;,b7 !re(7 ( su* individual1 &  
7,,iv7 any individual :o be>s a         
relation%ip to ! acc\nt b5efici>y t is  
describ$ 9 subp>agraph 7,c7 or 7,d7 (   
section #aeb7;d7 if ! acc\nt b5efici>y  
is or 0 a dep5d5t ( su* individual = any
 taxable ye> end+ be=e or ) ! taxable   
ye> 9 :i* ! individual atta9$ #ah ye>s (
 age1 &  7ii7 if1 on ! date su* m$ical  
c>e 0 provid$1 su* individual1 sp\se or 

dep5d5t to :om su* c>e 0 provid$ 0 cov]$
 "u ! qualifi$ heal? insurance ( !      
acc\nt b5efici>y4  7,b7 ,modifi$        
def9ition ( m$ical c>e ,= purposes (    
subp>agraph 7,a71 ! t]m m$ical c>e has !
 mean+ giv5 su* t]m by section #bac7;d71
 except t su* t]m includes-- 7i7 direct 
pay arrangem5ts ) prim>y physicians1 &  
7ii7 pr$et]m9$ level ( access to c>e f  
an integrat$ heal? plan4  7#c7 ,acc\nt  
b5efici>y ,! t]m acc\nt b5efici>y means 
! individual on ^: behalf ! ,m$isave    
acc\nt 0 e/abli%$4  7#d7 ,c]ta9 rules to
 apply ,rules simil> to ! foll[+ rules  
%all apply = purposes ( ?is section3    
7,a7 ,section #bai7;d77#b7 7relat+ to no
 d$uction = rollov]s74  7,b7 ,section   
#bai7;f77#c7 7relat+ to "t :5           
contributions deem$ made74  7,c7 ,except
 z provid$ 9 section #ajf7;d71 section  
#bai7;f77#e7 7relat+ to employ]         
paym5ts74  7,d7 ,section #djh7;g7       
7relat+ to community prop]ty laws74     
7,e7 ,section #djh7;h7 7relat+ to       
cu/odial acc\nts74  7b7 ,limitations    

7#a7 ,annual limitation  7,a7 ,9 g5]al  
,! limitation am\nt specifi$ 9 ?is      
p>agraph is-- 7i7 #aj1jjj 9 ! case ( a  
qualifi$ heal? plan ) an actu>ial value 
( less ?an #ee p]c5t1  7ii7 #h1fjj 9 !  
case ( a qualifi$ heal? plan ) an       
actu>ial value t is #ee p]c5t or m &    
less ?an #fe p]c5t1 &  7iii7 #g1bjj 9 ! 
case ( a qualifi$ heal? plan ) an       
actu>ial value t is #fe p]c5t or m4     
7,b7 ,actu>ial value ( qualifi$ heal?   
plan ,= purposes ( subp>agraph 7,a71 !  
actu>ial value ( a qualifi$ heal? plan  
is ! p]c5tage ( ! total av]age co/s (   
cov]$ b5efits "u ! heal? plan4  7#b7    
,acc\nt accumulation limitation ,!      
limitation am\nt specifi$ 9 ?is p>agraph
 is #ej1jjj4  7#c7 ,index+  7,a7 ,9     
g5]al ,9 ! case ( any taxable ye> beg9n+
 9 a cal5d> ye> aft] #bjbj1 ea* doll>   
am\nt conta9$ 9 p>agraph 7#a77;,a7 %all 
be increas$ by ! m$ical c>e co/ adju/m5t
 ( su* am\nt = su* cal5d> ye>4  7,b7    
,m$ical c>e co/ adju/m5t ,= purposes (  
subp>agraph 7,a71 ! m$ical c>e co/      

adju/m5t = any cal5d> ye> is ! p]c5tage 
7if any7 by :i*-- 7i7 ! m$ical c>e      
compon5t ( ! ,c-,,cpi-,u 7z def9$ 9     
section #a7;f77#f77 = ,augu/ ( ! prec$+ 
cal5d> ye>1 exce$s  7ii7 su* compon5t ( 
! ,c-,,cpi-,u 7z s def9$7 = ,augu/ (    
#bjai4  7,c7 ,r\nd+  7i7 ,annual        
limitation ,if any increase 9 a doll>   
am\nt conta9$ 9 p>agraph 7#a77;,a7      
det]m9$ "u subp>agraph 7,a7 is n a      
multiple ( #ajj1 su* increase %all be   
r\nd$ to ! ne>e/ multiple ( #ajj4  7ii7 
,acc\nt limitation ,if any increase 9 ! 
doll> am\nt conta9$ 9 p>agraph 7#b7     
det]m9$ "u subp>agraph 7,a7 is n a      
multiple ( #a1jjj1 su* increase %all be 
r\nd$ to ! ne>e/ multiple ( #a1jjj4     
7#d7 ,coord9ation ) o!r contributions ,!
 limitation :i* w\ld 7b = ?is p>agraph7 
apply "u p>agraphs 7#a7 & 7#b7 to an    
individual = any taxable ye> %all be    
r$uc$ 7b n bel[ z]o7 by ! sum (-- 7,a7 !
 aggregate am\nt contribut$ to ,m$isave 
acc\nts ( su* individual :i* is         
excludable f ! taxpay]'s gross income = 

su* taxable ye> "u section #ajf7;d71 &  
7,b7 ! aggregate am\nt contribut$ to    
,m$isave acc\nts ( su* individual = su* 
taxable ye> "u section #djh7;d77#i74    
7#e7 ,deposit ( advance premium tax     
cr$it ,an acc\nt b5efici>y :o is        
eligible = an advance paym5t ( ! premium
 tax cr$it may elect to h ! ,secret>y   
deposit ! advance paym5t into ! ,m$isave
 acc\nt ( ! acc\nt b5efici>y4  7c7      
,def9itions & special rules ,= purposes 
( ?is section-- 7#a7 ,eligible          
individual  7,a7 ,9 g5]al ,! t]m        
eligible individual means1 ) respect to 
any mon?1 any individual if su*         
individual is cov]$ "u a qualifi$ heal? 
plan z ( ! #a/ day ( su* mon?4  7,b7    
,c]ta9 cov]age disreg>d$ ,subp>agraph   
7,a7 %all be appli$ )\t reg>d to-- 7i7  
cov]age = any b5efit provid$ by p]mitt$ 
insurance1 &  7ii7 cov]age 7:e!r ?r\gh  
insurance or o!rwise7 = accid5ts1       
disability1 d5tal c>e1 vision c>e1 or   
long-t]m c>e4  7,c7 ,special rule =     
individuals eligible = c]ta9 vet]ans    

b5efits ,an individual %all n fail to be
 treat$ z an eligible individual = any  
p]iod m]ely because ! individual        
receives hospital c>e or m$ical s]vices 
"u any law adm9i/]$ by ! ,secret>y (    
,vet]ans ,affairs = a s]vice-connect$   
disability 7)9 ! mean+ ( section        
#aja7af7 ( title #ch1 ,unit$ ,/ates     
,code74  7#b7 ,qualifi$ heal? plan  7,a7
 ,9 g5]al ,! t]m qualifi$ heal? plan    
means a heal? plan t (f]s heal?         
insurance cov]age4 ,su* t]m includes    
entitlem5t to b5efits "u title ,,xviii  
or title ,,xix ( ! ,social ,security    
,act4  7,b7 ,exclusion ( c]ta9 plans    
,su* t]m does n include a heal? plan if 
sub/antially all ( its cov]age is       
disreg>d$ "u p>agraph 7#a77;,b74  7,c7  
,heal? insurance cov]age ,! t]m heal?   
insurance cov]age means b5efits consi/+ 
( m$ical c>e 7provid$ directly1 ?r\gh   
insurance or reimbursem5t1 or o!rwise & 
includ+ items & s]vices paid = z m$ical 
c>e7 "u any hospital or m$ical s]vice   
policy or c]tificate1 hospital or m$ical

 s]vice plan contract1 or heal?         
ma9t5ance organization contract (f]$ by 
a heal? insurance issu]4  7,d7 ,heal?   
insurance issu] ,! t]m heal? insurance  
issu] means an insurance company1       
insurance s]vice1 or insurance          
organization 7includ+ a heal? ma9t5ance 
organization7 :i* is lic5s$ to engage 9 
! bus9ess ( insurance 9 a ,/ate & :i* is
 subject to ,/ate law :i* regulates     
insurance 7)9 ! mean+ ( section         
#ead7;b77#b7 ( ! ,employee ,retirem5t   
,income ,security ,act ( #aigd 7#bi     
,u4,s4,c4 #aadd7;b77#b774  7,e7 ,heal?  
ma9t5ance organization ,! t]m heal?     
ma9t5ance organization means-- 7i7 a    
,f$]ally qualifi$ heal? ma9t5ance       
organization 7z def9$ 9 section         
#acja7;a7 ( ! ,public ,heal? ,s]vice    
,act 7#db ,u4,s4,c4 #cjj;e7a771  7ii7 an
 organization recogniz$ "u ,/ate law z a
 heal? ma9t5ance organization1 or  7iii7
 a simil> organization regulat$ "u ,/ate
 law = solv5cy 9 ! same mann] & to !    
same ext5t z su* a heal? ma9t5ance      

organization4  7#c7 ,p]mitt$ insurance  
,! t]m p]mitt$ insurance means-- 7,a7   
insurance if sub/antially all ( !       
cov]age provid$ "u su* insurance relates
 to-- 7i7 liabilities incurr$ "u work]s'
 comp5sation laws1  7ii7 tort           
liabilities1  7iii7 liabilities relat+  
to own]%ip or use ( prop]ty1 or  7iv7   
su* o!r simil> liabilities z ! ,secret>y
 may specify by regulations1  7,b7      
insurance = a specifi$ disease or       
illness1 &  7,c7 insurance pay+ a fix$  
am\nt p] day 7or o!r p]iod7 (           
hospitalization4  7#d7 ,family cov]age  
,! t]m family cov]age means any cov]age 
o!r ?an self-only cov]age4  7d7 ,tax    
treatm5t ( acc\nts  7#a7 ,9 g5]al ,a    
,m$isave acc\nt is exempt f taxation "u 
?is subtitle unless su* acc\nt has ceas$
 to be a ,m$isave acc\nt4 ,not)/&+ !    
prec$+ s5t5ce1 any ,m$isave acc\nt is   
subject to ! taxes impos$ by section    
#eaa 7relat+ to imposition ( tax on     
unrelat$ bus9ess income ( *>itable1 etc4
 organizations74  7#b7 ,acc\nt          

t]m9ations ,rules simil> to ! rules (   
p>agraphs 7#b7 & 7#d7 ( section #djh7;e7
 %all apply to ,m$isave acc\nts1 & any  
am\nt treat$ z di/ribut$ "u su* rules   
%all be treat$ z n us$ to pay qualifi$  
m$ical exp5ses4  7e7 ,tax treatm5t (    
di/ributions  7#a7 ,am\nts us$ =        
qualifi$ m$ical exp5ses ,any am\nt paid 
or di/ribut$ out ( a ,m$isave acc\nt :i*
 is us$ exclusively to pay qualifi$     
m$ical exp5ses ( any acc\nt b5efici>y   
%all n be includible 9 gross income4    
7#b7 ,inclusion ( am\nts n us$ =        
qualifi$ m$ical exp5ses ,any am\nt paid 
or di/ribut$ out ( a ,m$isave acc\nt :i*
 is n us$ exclusively to pay ! qualifi$ 
m$ical exp5ses ( ! acc\nt b5efici>y %all
 be includ$ 9 ! gross income ( su*      
b5efici>y4  7#c7 ,excess contributions  
return$ be=e due date ( return  7,a7 ,9 
g5]al ,if any excess contribution is    
contribut$ = a taxable ye> to any       
,m$isave acc\nt ( an individual1        
p>agraph 7#b7 %all n apply to           
di/ributions f ! ,m$isave acc\nts ( su* 

individual 7to ! ext5t su* di/ributions 
d n exce$ ! aggregate excess            
contributions to all su* acc\nts ( su*  
individual = su* ye>7 if-- 7i7 su*      
di/ribution is receiv$ by ! individual  
on or be=e ! la/ day prescrib$ by law   
7includ+ ext5sions ( "t7 = fil+ su*     
individual's return = su* taxable ye>1 &
  7ii7 su* di/ribution is accompani$ by 
! am\nt ( net income attributable to su*
 excess contribution4  ,any net income  
describ$ 9 clause 7ii7 %all be includ$ 9
 ! gross income ( ! individual = !      
taxable ye> 9 :i* x is receiv$4  7,b7   
,excess contribution ,= purposes (      
subp>agraph 7,a71 ! t]m excess          
contribution means any contribution 7o!r
 ?an a rollov] contribution describ$ 9  
p>agraph 7#e77 :i* exce$s ! limitations 
specifi$ 9 subsection 7b74  7#d7        
,additional tax on di/ributions n us$ = 
qualifi$ m$ical exp5ses  7,a7 ,9 g5]al  
,! tax impos$ by ?is *apt] on ! acc\nt  
b5efici>y = any taxable ye> 9 :i* !re is
 a paym5t or di/ribution f a ,m$isave   

acc\nt ( su* b5efici>y :i* is includible
 9 gross income "u p>agraph 7#b7 %all be
 increas$ by #bj p]c5t ( ! am\nt :i* is 
s includible4  7,b7 ,exception =        
disability or dea? ,subp>agraph 7,a7    
%all n apply if ! paym5t or di/ribution 
is made aft] ! acc\nt b5efici>y becomes 
disabl$ )9 ! mean+ ( section #gb7m77#g7 
or dies4  7#e7 ,rollov] contribution    
7,a7 ,9 g5]al ,an am\nt is describ$ 9   
?is subp>agraph z a rollov] contribution
 if x meets ! requirem5ts ( clauses 7i7 
& 7ii74 7i7 ,9 g5]al ,p>agraph 7#b7 %all
 n apply to any am\nt paid or di/ribut$ 
f a ,m$isave acc\nt to ! acc\nt         
b5efici>y to ! ext5t ! am\nt receiv$ is 
paid into a ,m$isave acc\nt = ! b5efit (
 su* b5efici>y n lat] ?an ! #fj? day    
aft] ! day on :i* ! b5efici>y receives !
 paym5t or di/ribution4  7ii7           
,limitation ,?is p>agraph %all n apply  
to any am\nt describ$ 9 clause 7i7      
receiv$ by an individual f a ,m$isave   
acc\nt if1 at any "t dur+ ! #a-ye> p]iod
 end+ on ! day ( su* receipt1 su*       

individual receiv$ any o!r am\nt        
describ$ 9 clause 7i7 f a ,m$isave      
acc\nt :i* 0 n includible 9 !           
individual's gross income because ( !   
application ( ?is p>agraph4  7,b7       
,rollov] f ,,fsa1 ,ar*] ,,msa1 & ,,hsa  
,an am\nt is describ$ 9 ?is subp>agraph 
= a cal5d> ye> z a rollov] contribution 
if ! am\nt is ! rema9+ balance 9 a      
flexible sp5d+ acc\nt1 ,ar*] ,,msa1 or  
heal? sav+s acc\nt t is contribut$ to ! 
,m$isave acc\nt = a taxable ye> end+ on 
or be=e "o ye> aft] ! date ( ! enactm5t 
( ! ,family ,fir/ ,m$isave ,emp[]m5t    
,act4  7#f7 ,coord9ation ) m$ical exp5se
 d$uction ,= purposes ( det]m9+ ! am\nt 
( ! d$uction "u section #bac1 any paym5t
 or di/ribution out ( a ,m$isave acc\nt 
= qualifi$ m$ical exp5ses %all n be     
treat$ z an exp5se paid = m$ical c>e4   
7#g7 ,transf] ( acc\nt incid5t to       
divorce ,! transf] ( an individual's    
int]e/ 9 a ,m$isave acc\nt to an        
individual's sp\se or =m] sp\se "u a    
divorce or sep>ation in/rum5t describ$ 9

 clause 7i7 ( section #aba7;d77#c77;,c7 
%all n be consid]$ a taxable transf]    
made by su* individual not)/&+ any o!r  
provision ( ?is subtitle1 & su* int]e/  
%all1 aft] su* transf]1 be treat$ z a   
,m$isave acc\nt ) respect to :i* su*    
sp\se is ! acc\nt b5efici>y4  7#h7      
,treatm5t aft] dea? ( acc\nt b5efici>y  
7,a7 ,treatm5t if designat$ b5efici>y is
 sp\se ,if ! acc\nt b5efici>y's surviv+ 
sp\se acquires su* b5efici>y's int]e/ 9 
a ,m$isave acc\nt by reason ( be+ !     
designat$ b5efici>y ( su* acc\nt at !   
dea? ( ! acc\nt b5efici>y1 su* ,m$isave 
acc\nt %all be treat$ z if ! sp\se 7 !  
acc\nt b5efici>y4  7,b7 ,o!r cases  7i7 
,9 g5]al ,if1 by reason ( ! dea? ( !    
acc\nt b5efici>y1 any p]son acquires !  
acc\nt b5efici>y's int]e/ 9 a ,m$isave  
acc\nt 9 a case to :i* subp>agraph 7,a7 
does n apply-- 7,i7 su* acc\nt %all     
cease to be a ,m$isave acc\nt z ( ! date
 ( dea?1 &  7,,ii7 an am\nt equal to !  
fair m>ket value ( ! assets 9 su* acc\nt
 on su* date %all be includible if su*  

p]son is n ! e/ate ( su* b5efici>y1 9   
su* p]son's gross income = ! taxable ye>
 :i* includes su* date1 or if su* p]son 
is ! e/ate ( su* b5efici>y1 9 su*       
b5efici>y's gross income = ! la/ taxable
 ye> ( su* b5efici>y4  7ii7 ,special    
rules  7,i7 ,r$uction ( inclusion =     
pr$ea? exp5ses ,! am\nt includible 9    
gross income "u clause 7i7 by any p]son 
7o!r ?an ! e/ate7 %all be r$uc$ by !    
am\nt ( qualifi$ m$ical exp5ses :i* 7   
incurr$ by ! dec$5t be=e ! date ( !     
dec$5t's dea? & paid by su* p]son )9 #a 
ye> aft] su* date4  7,,ii7 ,d$uction =  
e/ate taxes ,an appropriate d$uction    
%all be all[$ "u section #fia7;c7 to any
 p]son 7o!r ?an ! dec$5t or ! dec$5t's  
sp\se7 ) respect to am\nts includ$ 9    
gross income "u clause 7i7 by su* p]son4
  7f7 ,reports ,! ,secret>y may         
require-- 7#a7 ! tru/ee ( a ,m$isave    
acc\nt to make su* reports reg>d+ su*   
acc\nt to ! ,secret>y & to ! acc\nt     
b5efici>y ) respect to contributions1   
di/ributions1 ! return ( excess         

contributions1 & su* o!r matt]s z !     
,secret>y det]m9es appropriate1 &  7#b7 
any p]son :o provides an individual ) a 
qualifi$ heal? plan to make su* reports 
to ! ,secret>y & to ! acc\nt b5efici>y )
 respect to su* plan z ! ,secret>y      
det]m9es appropriate4  ,! reports       
requir$ by ?is subsection %all be fil$  
at su* "t & 9 su* mann] & furni%$ to su*
 individuals at su* "t & 9 su* mann] z  
may be requir$ by ! ,secret>y4  7g7     
,regulations & guidance ,= purposes (   
?is section1 ! ,secret>y %all prescribe 
su* regulations or o!r guidance z !     
,secret>y det]m9es necess>y or          
appropriate to c>ry out ?is section1    
includ+ regulations or guidance on !    
me?ods acceptable to ! ,secret>y =      
det]m9+ qualifi$ heal? plan actu>ial    
value4  4  7b7 ,treatm5t ( employ]      
paym5ts  7#a7 ,exclusion limit$ to      
self-fund$ major m$ical plan ( employ]s 
,section #aje7;b7 ( su* ,code is am5d$  
by /rik+ paid1 & ins]t+ paid "u a       
self-fund$ major m$ical plan ( !        

employ]4  7#b7 ,exclusion n applicable  
to heal? reimbursem5t arrangem5ts       
,subsection 7h7 ( su* ,code is am5d$ to 
read z foll[s3  7h7 ,exclusion n        
applicable to heal? reimbursem5t        
arrangem5ts ,subsection 7b7 %all n apply
 to heal? reimbursem5t arrangem5ts4  4  
7#c7 ,repeal ( exclusions f income =    
,ar*] ,m,s,as1 ,f,s,as1 & ,h,s,as  7,a7 
,9 g5]al ,section #ajf ( su* ,code is   
am5d$-- 7i7 by /rik+ subsections 7b71   
7d71 & 7e71 &  7ii7 by r$esignat+       
subsections 7f7 & 7g7 z subsections 7d7 
& 7e71 respectively4  7,b7 ,exclusion f 
income = ,m$isave acc\nts ,section #ajf 
( su* ,code1 z am5d$ by subp>agraph     
7,a71 is am5d$ by ins]t+ aft] subsection
 7a7 ! foll[+3  7b7 ,contributions to   
,m$isave acc\nts  7#a7 ,9 g5]al ,9 !    
case ( an employee :o is an eligible    
individual 7z def9$ 9 section           
#ecj;,a7c77#a771 am\nts contribut$ by   
su* employee's employ] to any ,m$isave  
acc\nt 7z def9$ 9 section #ecj;,a7a77 ( 
su* employee %all be treat$ z           

employ]-provid$ cov]age = m$ical exp5ses
 "u an accid5t or heal? plan to ! ext5t 
su* am\nts d n exce$ ! limitations      
specifi$ 9 clauses 7ii7 & 7iii7 (       
section #ecj;,a7a77#a77;,a7 7det]m9$ )\t
 reg>d to ?is subsection7 :i* is        
applicable to su* employee = su* taxable
 ye>4  7#b7 ,no con/ructive receipt ,no 
am\nt %all be includ$ 9 ! gross income (
 any employee solely because ! employee 
may *oose betwe5 ! contributions ref]r$ 
to 9 p>agraph 7#a7 & employ]            
contributions to ano!r heal? plan ( !   
employ]4  7#c7 ,special rule = d$uction 
( employ] contributions ,any employ]    
contribution to a ,m$isave acc\nt1 if   
o!rwise all[able z a d$uction "u ?is    
*apt]1 %all be all[$ only = ! taxable   
ye> 9 :i* paid4  7#d7 ,employ] ,m$isave 
acc\nt contributions requir$ to be %[n  
on return ,e individual requir$ to file 
a return "u section #fjab = ! taxable   
ye> %all include on su* return !        
aggregate am\nt contribut$ by employ]s  
to ! ,m$isave acc\nts ( su* individual  

or su* individual's sp\se = su* taxable 
ye>4  7#e7 ,m$isave acc\nt contributions
 n "p ( ,,cobra cov]age ,p>agraph 7#a7  
%all n apply = purposes ( section       
#dihj;,b4  7#f7 ,cross ref]5ce ,= p5alty
 on failure by employ] to make comp>able
 contributions to ! ,m$isave acc\nts (  
comp>able employees1 see section        
#dihj;,g4  4  7#d7 ,di/ribution f c]ta9 
retirem5t acc\nts = ,m$isave acc\nt     
fund+ ,section #djh7;d77#i7 ( su* ,code 
is am5d$ to read z foll[s3  7#i7        
,di/ribution = ,m$isave acc\nt fund+    
7,a7 ,9 g5]al ,9 ! case ( an individual 
:o is an eligible individual 7z def9$ 9 
section #ecj;,a7c77#a77 & :o elects !   
application ( ?is p>agraph = a taxable  
ye>1 gross income ( ! individual = !    
taxable ye> does n include a qualifi$   
,m$isave acc\nt fund+ di/ribution to !  
ext5t su* di/ribution is o!rwise        
includible 9 gross income4  7,b7        
,qualifi$ ,m$isave acc\nt fund+         
di/ribution ,= purposes ( ?is p>agraph1 
! t]m qualifi$ ,m$isave acc\nt fund+    

di/ribution means a di/ribution f an    
individual retirem5t plan 7o!r ?an a    
plan describ$ 9 subsection 7k7 or 7p77 (
 ! employee to ! ext5t t-- 7i7 su*      
di/ribution is contribut$ to ! ,m$isave 
acc\nt ( ! individual 9 a direct        
tru/ee-to-tru/ee transf]1 &  7ii7 su*   
di/ribution-- 7,i7 :5 add$ to previ\s   
contributions to ! ,m$isave acc\nt = !  
cal5d> ye> does n exce$ ! limitation    
am\nt specifi$ 9 section #ecj;,a7b77#a71
 &  7,,ii7 :5 add$ to ! balance ( !     
,m$isave acc\nt1 exce$s ! limitation    
am\nt specifi$ 9 section #ecj;,a7b77#b74
  7,c7 ,"o-"t transf] ,an individual may
 make an election "u subp>agraph 7,a7   
only = "o qualifi$ ,m$isave acc\nt fund+
 di/ribution dur+ ! lifetime ( !        
individual4 ,su* an election1 once made1
 %all be irrevocable4  7,d7 ,application
 ( section #gb ,not)/&+ section #gb1 9  
det]m9+ ! ext5t to :i* an am\nt is      
treat$ z o!rwise includible 9 gross     
income = purposes ( subp>agraph 7,a71 ! 
aggregate am\nt di/ribut$ f an          

individual retirem5t plan %all be treat$
 z includible 9 gross income to ! ext5t 
t su* am\nt does n exce$ ! aggregate    
am\nt :i* w\ld h be5 s includible if all
 am\nts f all individual retirem5t plans
 7 di/ribut$4 ,prop] adju/m5ts %all be  
made 9 apply+ section #gb to o!r        
di/ributions 9 su* taxable ye> &        
subsequ5t taxable ye>s4  4  7#e7        
,failure ( employ] to make comp>able    
contributions  7,a7 ,section #dihj;,g7a7
 ( su* ,code is am5d$ by /rik+ heal?    
sav+s acc\nt & ins]t+ ,m$isave acc\nt4  
7,b7 ,section #dihj;,g7c7 ( su* ,code is
 am5d$ by /rik+ ,ar*] ,m,s,as & heal?   
sav+s acc\nts & ins]t+ ,m$isave acc\nts4
  7#f7 ,w-#b /atem5ts ,section #fjea7;a7
 ( su* ,code is am5d$-- 7,a7 by /rik+   
p>agraph 7#aa7 & r$esignat+ p>agraphs   
7#ab7 ?r\gh 7#ag7 z p>agraphs 7#aa7     
?r\gh 7#af71 respectively1 &  7,b7 by   
am5d+ p>agraph 7#aa71 z s r$esignat$1 to
 read z foll[s3  7#aa7 ! am\nt          
contribut$ to any ,m$isave acc\nt 7z    
def9$ 9 section #ecj;,a7 ( su* employee 

or su* employee's sp\se1  4  7c7 ,o!r   
con=m+ am5dm5ts  7#a7 ,ar*] ,m,s,as     
,section #bbj7;a7 ( su* ,code is am5d$  
by add+ at ! end ! foll[+3 ,no am\nt is 
all[$ z a d$uction "u ! prec$+ s5t5ce = 
any taxable ye> beg9n+ aft] "o ye> aft] 
! date ( ! enactm5t ( ,family ,fir/     
,m$isave ,emp[]m5t ,act44  7#b7 ,heal?  
sav+s acc\nts ,section #bbc7;a7 ( su*   
,code is am5d$ by add+ at ! end !       
foll[+3 ,no am\nt is all[$ z a d$uction 
"u ! prec$+ s5t5ce = any taxable ye>    
beg9n+ aft] "o ye> aft] ! date ( !      
enactm5t ( ! ,family ,fir/ ,m$isave     
,emp[]m5t ,act44  7d7 ,rollov] ( ,,fsa1 
,ar*] ,,msa1 ,,hsa to ,m$isave acc\nt   
,not)/&+ any o!r provision ( law1 if !  
rema9+ balance 9 a heal? flexible sp5d+ 
arrangem5t1 ,ar*] ,,msa1 or ,heal?      
,sav+s ,acc\nt is transf]r$ to a        
,m$isave acc\nt be=e ! end ( any taxable
 ye> end+ on or be=e "o ye> aft] ! date 
( ! enactm5t ( ! ,family ,fir/ ,m$isave 
,emp[]m5t ,act1 su* transf] %all be     
treat$ z a rollov] to ! ,m$isave acc\nt 

"u section #ecj;,a7e77#e77;,b7 ( !      
,int]nal ,rev5ue ,code ( #aihf & !      
di/ribution f ! heal? flexible sp5d+    
arrangem5t1 ,ar*] ,,msa1 or ,heal?      
,sav+s ,acc\nt %all n be includible 9   
gross income4  7e7 ,cl]ical am5dm5ts ,! 
table ( sections = "p ,,viii ( sub*apt] 
,f ( *apt] #a ( su* ,code is am5d$ by   
add+ at ! end ! foll[+ new item3  ,sec4 
#ecj;,a4 ,m$isave ,acc\nts4  4  7f7     
,effective date ,! am5dm5ts made by ?is 
section %all apply to taxable ye>s      
beg9n+ aft] "o ye> aft] ! date ( !      
enactm5t ( ?is ,act4  #c4 ,tax cr$it =  
contributions to ,m$isave acc\nt dur+   
fir/ ye>  7a7 ,9 g5]al ,9 ! case ( an   
individual :o makes a contribution to a 
,m$isave acc\nt be=e ! end ( ! #a-ye>   
p]iod beg9n+ on ! date ( ! enactm5t (   
?is ,act1 !re %all be all[$ z a cr$it   
aga9/ ! tax impos$ by subtitle ,a ( !   
,int]nal ,rev5ue ,code ( #aihf = !      
taxable ye> 9 :i* ! contribution is made
 an am\nt equal to ! aggregate ( #a = e 
#c contribut$ to ! acc\nt 7o!r ?an a    

rollov] contribution "u section         
#ecj;,a7e77#e7 ( su* ,code7 = su*       
taxable ye>4  7b7 ,limitation ,!        
aggregate am\nt all[$ to an individual z
 a cr$it "u subsection 7a7 = all taxable
 ye>s %all n exce$ #a1jjj4  7c7 ,portion
 ( cr$it refundable ,= purposes ( ?is   
section-- 7#a7 ,9 g5]al ,= purposes ( ! 
,int]nal ,rev5ue ,code ( #aihf1 9 ! case
 ( an eligible individual-- 7,a7        
,increase 9 cr$it rate ,subsection 7a7  
%all be appli$ by sub/itut+ #a = e #a   
contribut$ = #a = e #c contribut$4  7,b7
 ,cr$it refundable ,! cr$it all[$ "u ?is
 section %all be treat$ 9 ! same mann] z
 a cr$it all[$ "u subp>t ,c ( "p ,,iv ( 
sub*apt] ,a ( *apt] #a ( su* ,code4     
7#b7 ,eligible individual  7,a7 ,9 g5]al
 ,! t]m eligible individual means1 )    
respect to any taxable ye>1 a taxpay] ^:
 h\sehold income = ! taxable ye> does n 
exce$s #djj p]c5t ( an am\nt equal to ! 
pov]ty l9e = a family ( ! size involv$4 
7,b7 ,m>ri$ c\ples mu/ file jo9t return 
,if ! taxpay] is m>ri$ 7)9 ! mean+ (    

section #ggjc ( su* ,code7 at ! close ( 
! taxable ye>-- 7i7 ! taxpay] %all be   
treat$ z an eligible individual only if 
! taxpay] & ! taxpay]'s sp\se file a    
jo9t return = ! taxable ye>1 &  7ii7    
p>agraph 7#a7 %all be appli$ sep>ately  
to ea* sp\se4  7#c7 ,family size1       
h\sehold income1 modifi$ adju/$ gross   
income1 pov]ty l9e ,! t]ms family size1 
h\sehold income1 modifi$ adju/$ gross   
income1 & pov]ty l9e h ! mean+ giv5 su* 
t]ms by section #cf;,b7d7 ( su* ,code4  
7d7 ,d5ial ( cr$it to dep5d5ts ,no cr$it
 %all be all[$ "u ?is section to any    
individual ) respect to :om a d$uction  
"u section #aea is all[able to ano!r    
taxpay] = a taxable ye> beg9n+ 9 !      
cal5d> ye> 9 :i* su* individual's       
taxable ye> beg9s4  #d4 ,alt]native     
waiv] = ,/ate innovation2 co/-%>+       
r$uction paym5ts  7a7 ,alt]native waiv] 
= ,/ate innovation ,section #accb ( !   
,pati5t ,protection & ,af=dable ,c>e    
,act 7#db ,u4,s4,c4 #ahjeb7 is am5d$ by 
add+ at ! end ! foll[+ new subsection3  

7f7 ,alt]native waiv] = ,/ate innovation
  7#a7 ,9 g5]al ,not)/&+ any prec$+     
provision ( ?is section1 a ,/ate may    
apply to ! ,secret>y = ! waiv] ( any    
requirem5t ( subsection 7a77#b7 )       
respect to heal? insurance cov]age )9 t 
,/ate = plan ye>s beg9n+ on or aft]     
,janu>y #a1 #bjbb1 if in/ead ( comply+ )
 section #adjb ! ,/ate provides = !     
di/ribution ( fund+ receiv$ "u p>agraph 
7#b7 to ,m$isave acc\nts ( qualify+     
individuals ) respect to su* ,/ate4 ,su*
 application %all be fil$ at su* "t & 9 
su* mann] z ! ,secret>y may require1 &  
%all include su* in=mation z ! ,secret>y
 may require 7includ+ a #aj-ye> budget  
plan = su* plan t is budget neutral = ! 
,f$]al ,gov]nm5t74  7#b7 ,pass-?r\gh    
fund+ ,) respect to a ,/ate waiv] "u    
p>agraph 7#a71 "u :i*1 due to ! /ructure
 ( su* waiv]1 individuals 9 ! ,/ate w\ld
 n qualify = co/-%>+ r$uctions "u       
section #adjb = :i* !y w\ld o!rwise be  
eligible1 ! ,secret>y %all provide = an 
alt]native means by :i* an am\nt is     

transf]r$ to ! ,/ate equal to !         
aggregate am\nt ( su* r$uctions t w\ld h
 be5 paid on behalf ( ! p>ticipants 9 ! 
,ex*anges e/abli%$ "u ?is title-- 7,a7  
_h ! ,/ate n receiv$ su* waiv]2  7,b7 _h
 ref]5ces to eligible insur$s "u section
 #adjb ref]r$ to qualify+ insur$s 7z    
def9$ 9 section #accb7;f772 &  7,c7 _h1 
aft] application ( clause 7ii71 9 ! case
 ( a qualify+ insur$ enroll$ 9 ! bronze 
level ( cov]age-- 7i7 ! p]c5tages       
specifi$ 9 subclauses 7,i71 7,,ii71 &   
7,,iii7 ( section #adjb7;c77#a77;,b7 7  
ref]5ces to #hd p]c5t1 #gg p]c5t1 & #fc 
p]c5t1 respectively2 &  7ii7 ! ref]5ces 
9 subp>agraphs 7,a71 7,b71 & 7,c7 (     
section #adjb7;c77#b7 to #id p]c5t1 #hg 
p]c5t1 & #gc p]c5t1 respectively1 7     
ref]5ces to #hd p]c5t1 #gg p]c5t1 & #fc 
p]c5t1 respectively4  ,! am\nt transf]r$
 pursuant to ! previ\s s5t5ce %all be   
det]m9$ annually by ! ,secret>y1 tak+   
into consid]ation ! exp]i5ce ( o!r      
,/ates ) respect to p>ticipation 9 an   
,ex*ange & r$uctions provid$ "u su*     

provisions to resid5ts ( ! o!r ,/ates1 &
 %all be paid to ! ,/ate = purposes (   
implem5t+ su* waiv]4  7#c7 ,waiv]       
consid]ation & transp>5cy ,! provisions 
( p>agraph 7#d7 ( subsection 7a7 %all   
apply to an application = a waiv] "u    
p>agraph 7#a7 9 ! same mann] z su*      
provisions apply ) respect to an        
application = a waiv] "u subsection     
7a77#a71 except t1 = purposes ( ?is     
p>agraph1 ! provisions ( subsection     
7a77#d77;,b77ii7 %all n apply4  7#d7    
,det]m9ations2 t]m ( waiv] ,! provisions
 ( subsections 7d7 & 7e7 %all apply )   
respect to a det]m9ation ) respect to an
 application "u p>agraph 7#a71 & )      
respect to ! t]m ( a waiv] "u su*       
p>agraph1 9 ! same mann] z su*          
provisions apply ) respect to a         
det]m9ation ) respect to an application 
"u subsection 7a77#a71 & ) respect to ! 
t]m ( a waiv] "u su* subsection4  7#e7  
,def9itions ,= purposes ( ?is           
subsection3 7,a7 ,m$isave acc\nt ,! t]m 
,m$isave acc\nt has ! mean+ giv5 su* t]m

 9 section #ecj;,a7a7 ( ! ,int]nal      
,rev5ue ,code ( #aihf4  7,b7 ,qualify+  
insur$ ,! t]m qualify+ insur$ means1 )  
respect to a ,/ate & a ye>1 an          
individual-- 7i7 :o is enroll$ 9 a      
,m$isave acc\nt2  7ii7 :o is enroll$ =  
su* ye> 9 a silv] level or bronze level 
cov]age (f]$ ?r\gh an ,ex*ange2 &  7iii7
 ^: h\sehold income is n less ?an #ajj  
p]c5t b n m ?an #bej p]c5t ( ! ,f$]al   
pov]ty l9e = a family ( ! size involv$4 
4  7b7 ,con=m+ am5dm5ts ,section #accb (
 ! ,pati5t ,protection & ,af=dable ,c>e 
,act 7#db ,u4,s4,c4 #ahjeb71 z am5d$ by 
subsection 7a71 is fur!r am5d$ 9        
subsection 7a77#d7-- 7#a7 9 subp>agraph 
7,a7 by /rik+ ! p]iod & ins]t+ 1 except 
9 ! case ( a waiv] describ$ 9 subsection
 7f742 &  7#b7 9 subp>agraph 7,b77ii7 by
 ins]t+ aft] an application ! foll[+3   
7except 9 ! case ( a waiv] describ$ 9   
subsection 7f774  7c7 ,appropriation =  
co/-,%>+ paym5ts ,section #adjb ( !     
,pati5t ,protection & ,af=dable ,c>e    
,act 7#db ,u4,s4,c4 #ahjga7 is am5d$ by 

add+ at ! end ! foll[+ new subsection3  
7g7 ,fund+  7#a7 ,appropriations ,out ( 
any funds 9 ! ,treasury n o!rwise       
appropriat$1 !re is appropriat$ su* sums
 z may be necess>y to1 subject to       
p>agraph 7#b71 provide heal? b5efits    
cov]age ?r\gh paym5t to issu]s 7"u ?is  
section or ?r\gh advance paym5t by !    
,secret>y ( ! ,treasury "u section      
#adab7;c77#c77 ( ! am\nts comput$ "u ?is
 section = ea* ( plan ye>s #bjbb ?r\gh  
#bjbf4  7#b7 ,adju/m5ts ,not)/&+ any o!r
 provision ( law1 paym5ts & o!r actions 
= adju/m5ts to obligations incurr$ prior
 to ,decemb] #ca1 #bjbb1 may be made    
?r\gh ,decemb] #ca1 #bjbb4  7#c7        
,limitation ,am\nts appropriat$ "u      
p>agraph 7#a7 = ea* ( plan ye>s #bjbb   
?r\gh #bjbf are subject to ! requirem5ts
 & limitations "u sections #ejf & #ejg (
 division ,h ( ,public ,law #aae-ca 9 ! 
same mann] & to ! same ext5t z if su*   
am\nts = ea* su* ye> 7 appropriat$ "u   
su* division4  4  #e4 ,grants = ,m$isave
 assi/ance & outrea*  7a7 ,9 g5]al ,!   

,adm9i/rator %all e/abli% a grant       
program to provide assi/ance to eligible
 entities to c>ry out ! activities      
describ$ 9 subsection 7c74  7b7         
,application ,an eligible entity %all   
submit an application to ! ,adm9i/rator 
9 su* "t & 9 su* mann] z ! ,adm9i/rator 
may require1 provid+ t su* application  
requires a demon/ration ( ! exi/5ce ( a 
relation%ip )1 or ! ability to e/abli% a
 relation%ip )1 an employ]1 employee1   
self-employ$ individual1 or consum]     
eligible to enroll 9 a ,m$isave acc\nt4 
7c7 ,use ( funds ,an eligible entity    
receiv+ a grant "u ?is section %all use 
su* funds to-- 7#a7 di/ribute fair &    
imp>tial in=mation to consum]s ab\t     
,m$isave acc\nts1 includ+ ! availability
 ( su* acc\nts & h[ su* acc\nts may be  
utiliz$2  7#b7 conduct activities to    
raise public aw>5ess ( ,m$isave acc\nts2
  7#c7 facilitate enrollm5t 9 ,m$isave  
acc\nts2 &  7#d7 ref] individuals       
enroll$ 9 a ,m$isave acc\nt to !        
appropriate (ficial1 organization1 or   

,/ate ag5cy = ! purpose ( address+ a    
compla9t1 grievance1 or o!r "q ) respect
 to su* ,m$isave acc\nt4  7d7 ,am\nt ,! 
,adm9i/rator may di/ribute up to        
#e1jjj1jjj annually to be divid$ among  
grant recipi5ts "u ?is section4  7e7    
,report ,n lat] ?an "o ye> aft] ! date  
on :i* ! la/ ( ! grant p]iods aw>d$ "u  
?is section ends1 ! ,adm9i/rator %all   
submit a report to ! ,congress on !     
effectiv5ess ( ! grants provid$ "u ?is  
section4  7f7 ,def9itions ,9 ?is        
section3 7#a7 ,adm9i/rator ,! t]m       
,adm9i/rator means ! ,adm9i/rator ( !   
,c5t]s = ,m$ic>e  ,m$icaid ,s]vices4    
7#b7 ,consum] ,! t]m consum] means an   
individual enroll$ 91 or seek+ to enroll
 91 a ,m$isave acc\nt4  7#c7 ,eligible  
entity ,! t]m eligible entity includes !
 foll[+3 7,a7 ,a ,/ate4  7,b7 ,trade4   
7,c7 ,indu/ry4  7,d7 ,pr(essional       
associations4  7,e7 ,comm]cial fi%+     
indu/ry organizations4  7,f7 ,ran*+ &   
f>m+ organizations4  7,g7 ,community &  
consum]-focus$ nonpr(it gr\ps4  7,h7    

,*amb]s ( comm]ce4  7,i7 ,unions4  7,j7 
,small bus9ess developm5t c5t]s 7z def9$
 9 section #ba ( ! ,small ,bus9ess ,act 
7#ae ,u4,s4,c4 #fdh774  7,k7 ,o!r       
entities capable ( c>ry+ out !          
activities describ$ "u subsection 7b74  
7#d7 ,m$isave acc\nt ,! t]m ,m$isave    
acc\nt has ! mean+ giv5 su* t]m 9       
section #ecj;,a7a7 ( ! ,int]nal ,rev5ue 
,code ( #aihf 7z add$ by section        
#b7;a774  7#e7 ,/ate ,! t]m ,/ate means 
ea* ( ! sev]al ,/ates1 ! ,di/rict (     
,columbia1 ea* t]ritory & possession ( !
 ,unit$ ,/ates1 & ea* f$]ally recogniz$ 
,indian ,tribe4