,,ii #aafth ,,congress #b;d ,session ,s4 #dcfg ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,july #bi1 #bjbj,mr4 ,paul 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 eliminate limitations on contributions to health savings accounts4 #a4 ,short title ,this ,act may be cited as the ,health ,savings ,accounts ,for ,all ,act of #bjbj4 #b4 ,repeal of contribution limitations 7a7 ,in general ,subsection 7b7 of section #bbc of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7b7 ,denial of deduction to dependents ,no deduction shall be allowed under this section to any individual with respect to whom a deduction under section #aea is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins4 4 7b7 ,conforming amendments 7#a7 ,subparagraph 7,a7 of section #bbc7;d77#a7 of the ,internal ,revenue ,code of #aihf is amended-- 7,a7 by striking subsection 7f77#e7 and inserting subsection 7f77#d71 and 7,b7 by striking accepted-- and all that follows and inserting accepted unless it is in cash44 7#b7 ,subsection 7f7 of section #bbc of such ,code is amended by striking paragraph 7#c7 and by redesignating paragraphs 7#d7 through 7#h7 as paragraphs 7#c7 through 7#g71 respectively4 7#c7 ,subsection 7g7 of section #bbc of such ,code is amended-- 7,a7 by striking subsections 7b77#b7 and 7c77#b77;,a7 both places it appears and inserting subsection 7c77#b77;,a71 and 7,b7 by amending subparagraph 7,b7 to read as follows3 7,b7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which such taxable year begins determined by substituting calendar year #bjjc for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 4 7#d7 ,section #bf7;b77#b7 of such ,code is amended-- 7,a7 by striking 1 #bbc7;b77#h77;,b77i77,,ii71 in subparagraph 7,s71 and 7,b7 by striking #bbc7;f77#d7 in subparagraph 7,u7 and inserting #bbc7;f77#c74 7#e7 ,paragraph 7#a7 of section #ajf7;d7 of such ,code is amended by striking under an accident or health plan and all that follows and inserting under an accident or health plan44 7#f7 ,subparagraph 7,c7 of section #ajf7;e77#d7 of such ,code is amended by striking #bbc7;f77#e7 and inserting #bbc7;f77#d74 7#g7 ,subparagraph 7,c7 of section #djh7;d77#i7 of such ,code is amended-- 7,a7 by striking ,limitations4-- in the heading and all that follows through 7ii7 ,one-time transfer4-- in clause 7ii71 and inserting ,one-time transfer4--1 7,b7 by redesignating subclauses 7,i7 and 7,,ii7 as clauses 7i7 and 7ii7 and moving such clauses #b ems to the left1 and 7,c7 by striking subclause 7,,ii7 in clause 7i71 as so redesignated1 and inserting clause 7ii74 7#h7 ,section #digc of such ,code is amended by striking subsection 7g7 and by redesignating subsection 7h7 as subsection 7g74 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #c4 ,freedom from mandate 7a7 ,in general ,section #bbc of the ,internal ,revenue ,code of #aihf1 as amended by section #b1 is further amended by striking subsections 7c7 and 7g7 and by redesignating subsections 7d71 7e71 7f71 and 7h7 as subsections 7c71 7d71 7e71 and 7f71 respectively4 7b7 ,conforming amendments 7#a7 ,subsection 7a7 of section #bbc of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7a7 ,deduction allowed ,in the case of an individual1 there shall be allowed as a deduction for the taxable year an amount equal to the aggregate amount paid in cash during such taxable year by or on behalf of such individual to a health savings account of such individual4 4 7#b7 ,subsection 7c77#a77;,a7 of section #bbc of such ,code1 as amended by section #b and redesignated by subsection 7a71 is further amended by striking subsection 7f77#d7 and inserting subsection 7e77#d74 7#c7 ,subparagraph 7,u7 of section #bf7;b77#b7 of such ,code1 as amended by section #b1 is further amended by striking section #bbc7;f77#c7 and inserting section #bbc7;e77#c74 7#d7 ,sections #ce7;g77#c71 #bbj7;f77#e77;,a71 #hdh7;e77#a77;,b77v71 #digc7;a77#e71 and #fjea7;a77#ab7 of such ,code are each amended by striking section #bbc7;d7 each place it appears and inserting section #bbc7;c74 7#e7 ,section #ajf7;d77#a7 of such ,code is amended-- 7,a7 by striking who is an eligible individual 7as defined in section #bbc7;c77#a771 and 7,b7 by striking section #bbc7;d7 and inserting section #bbc7;c74 7#f7 ,section #ajf7;e7 of such ,code is amended-- 7,a7 by striking paragraphs 7#c7 and 7#d7 and by redesignating paragraph 7#e7 as paragraph 7#d71 7,b7 by inserting after paragraph 7#b7 the following new paragraph3 7#c7 ,treatment as rollover contribution ,a qualified ,,hsa distribution shall be treated as a rollover contribution described in section #bbc7;e77#d74 1 and 7,c7 by striking to any eligible individual covered under a high deductible health plan of the employer in paragraph 7#d77;,b77ii7 7as so redesignated7 and inserting to any employee with respect to whom a health savings account has been established4 7#g7 ,section #djh7;d77#i77;,a7 of such ,code is amended by striking who is an eligible individual 7as defined in section #bbc7;c77 and4 7#h7 ,section #hgg;,a7g77#f7 of such ,code is amended by striking #bbc7;f77#d7 and inserting #bbc7;e77#d74 7#i7 ,section #dige of such ,code is amended-- 7,a7 in subsection 7c77#f7-- 7i7 by striking section #bbc7;d7 and inserting section #bbc7;c71 and 7ii7 by striking section #bbc7;e77#b7 and inserting section #bbc7;d77#b71 and 7,b7 in subsection 7e77#a77;,e71 by striking section #bbc7;d7 and inserting section #bbc7;c74 7#aj7 ,subsection 7b7 of section #dihj;,g of such ,code is amended to read as follows3 7b7 ,rules and requirements 7#a7 ,in general ,an employer meets the requirements of this subsection for any calendar year if the employer makes available comparable contributions to the health savings accounts of all comparable participating employees for each coverage period during such calendar year4 7#b7 ,comparable contributions 7,a7 ,in general ,for purposes of paragraph 7#a71 the term comparable contributions means contributions-- 7i7 which are the same amount1 or 7ii7 if the employees are covered by a health plan1 which are the same percentage of the annual deductible limit under the plan covering the employees4 7,b7 ,part-year employees ,in the case of an employee who is employed by the employer for only a portion of the calendar year1 a contribution to the health savings account of such employee shall be treated as comparable if it is an amount which bears the same ratio to the comparable amount 7determined without regard to this subparagraph7 as such portion bears to the entire calendar year4 7#c7 ,comparable participating employees ,for purposes of paragraph 7#a71 the term comparable participating employees means all employees who are covered 7if at all7 under the same health plan of the employer and have the same category of coverage4 ,for purposes of the preceding sentence1 the categories of coverage are self-only and family coverage4 7#d7 ,part-time employees 7,a7 ,in general ,paragraph 7#c7 shall be applied separately with respect to part-time employees and other employees4 7,b7 ,part-time employee ,for purposes of subparagraph 7,a71 the term part-time employee means any employee who is customarily employed for fewer than #cj hours per week4 4 7#aa7 ,section #dihj;,g7d7 of such ,code is amended by striking section #dihj;,e and inserting this section4 7#ab7 ,section #ffic7;a77#b77;,c7 of such ,code is amended by striking section #bbc7;h7 and inserting section #bbc7;f74 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #d4 ,allowance of distributions for prescription and over-the-counter medicines and drugs 7a7 ,h,s,as ,paragraph 7#b77;,a7 of section #bbc7;c7 of the ,internal ,revenue ,code of #aihf1 as redesignated by section #c1 is amended by adding at the end the following3 ,the term qualified medical expenses shall include an amount paid for any prescription or over-the-counter medicine or drug44 7b7 ,archer ,m,s,as ,section #bbj7;d77#b77;,a7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking section #bbc7;d77#b77;,d7 and inserting section #bbc7;c77#b77;,b71 and 7#b7 by adding at the end the following3 ,the term qualified medical expenses shall include an amount paid for any prescription or over-the-counter medicine or drug44 7c7 ,health flexible spending arrangements and health reimbursement arrangements ,subsection 7f7 of section #ajf of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7f7 ,reimbursements for all medicines1 drugs1 and menstrual care products ,for purposes of this section and section #aje-- 7#a7 reimbursement for expenses incurred for any prescription or over-the-counter medicine or drug shall be treated as a reimbursement for medical expenses1 and 7#b7 expenses incurred for menstrual care products 7as defined in section #bbc7;c77#b77;,b77 shall be treated as incurred for medical care4 4 7d7 ,effective dates 7#a7 ,distributions from savings accounts ,the amendments made by subsections 7a7 and 7b7 shall apply to amounts paid in taxable years beginning after the date of the enactment of this ,act4 7#b7 ,reimbursements ,the amendment made by subsection 7c7 shall apply to expenses incurred in plan years beginning after the date of the enactment of this ,act4 #e4 ,purchase of health insurance from ,,hsa 7a7 ,in general ,paragraph 7#b7 of section #bbc7;c7 of the ,internal ,revenue ,code of #aihf1 as redesignated by section #c1 is amended-- 7#a7 by striking subparagraphs 7,b7 and 7,c71 and 7#b7 by redesignating subparagraph 7,d7 as subparagraph 7,b74 7b7 ,conforming amendment ,paragraph 7#b7 of section #bbc7;c7 of the ,internal ,revenue ,code of #aihf1 as amended by the preceding sections of this ,act1 is further amended by striking and any dependent 7as defined in section #aeb1 determined without regard to subsections 7b77#a71 7b77#b71 and 7d77#a77;,b7 thereof7 of such individual and inserting any dependent 7as defined in section #aeb1 determined without regard to subsections 7b77#a71 7b77#b71 and 7d77#a77;,b7 thereof7 of such individual1 and any child 7as defined in section #aeb7;f77#a77 of such individual who has not attained the age of #bg before the end of such individual's taxable year4 7c7 ,effective date ,the amendments made by this section shall apply with respect to insurance purchased after the date of the enactment of this ,act in taxable years beginning after such date4 #f4 ,special rule for certain medical expenses incurred before establishment of account 7a7 ,in general ,paragraph 7#b7 of section #bbc7;c7 of the ,internal ,revenue ,code of #aihf1 as amended and redesignated by the preceding sections of this ,act1 is further amended by adding at the end the following new subparagraph3 7,c7 ,certain medical expenses incurred before establishment of account treated as qualified ,an expense shall not fail to be treated as a qualified medical expense solely because such expense was incurred before the establishment of the health savings account if such expense was incurred-- 7i7 during either-- 7,i7 the taxable year in which the health savings account was established1 or 7,,ii7 the preceding taxable year1 in the case of a health savings account established after the taxable year in which such expense was incurred but before the time prescribed by law for filing the return for such taxable year 7not including extensions thereof71 and 7ii7 for medical care which 7but for the fact that it was incurred before the establishment of the account7 otherwise meets the requirements of the preceding subparagraphs4 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #g4 ,administrative error correction before due date of return 7a7 ,in general ,paragraph 7#c7 of section #bbc7;e7 of the ,internal ,revenue ,code of #aihf1 as amended and redesignated by the preceding sections of this ,act1 is amended by adding at the end the following new subparagraph3 7,d7 ,exception for administrative errors corrected before due date of return ,subparagraph 7,a7 shall not apply if any payment or distribution is made to correct an administrative1 clerical1 or payroll contribution error and if-- 7i7 such distribution is received by the individual on or before the last day prescribed by law 7including extensions of time7 for filing such individual's return for such taxable year1 and 7ii7 such distribution is accompanied by the amount of net income attributable to such contribution4 ,any net income described in clause 7ii7 shall be included in the gross income of the individual for the taxable year in which it is received4 4 7b7 ,effective date ,the amendment made by this section shall take effect on the date of the enactment of this ,act4 #h4 ,allowing ,,hsa rollover to child or parent of account holder 7a7 ,in general ,paragraph 7#g77;,a7 of section #bbc7;e7 of the ,internal ,revenue ,code of #aihf1 as redesignated by the preceding sections of this ,act1 is amended-- 7#a7 by inserting 1 child1 parent1 or grandparent after surviving spouse1 7#b7 by inserting 1 child1 parent1 or grandparent1 as the case may be1 after the spouse1 7#c7 by inserting 1 child1 parent1 or grandparent after spouse in the heading thereof1 and 7#d7 by adding at the end the following3 ,in the case of a child who acquires such beneficiary's interest and with respect to whom a deduction under section #aea is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins1 such health savings account shall be treated as a health savings account of such child44 7b7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #i4 ,equivalent bankruptcy protections for health savings accounts as retirement funds 7a7 ,in general ,section #ebb of title #aa1 ,united ,states ,code1 is amended by adding at the end the following new subsection3 7r7 ,treatment of health savings accounts ,for purposes of this section1 any health savings account 7as described in section #bbc of the ,internal ,revenue ,code of #aihf7 shall be treated in the same manner as an individual retirement account described in section #djh of such ,code4 4 7b7 ,effective date ,the amendment made by this section shall apply to cases commencing under title #aa1 ,united ,states ,code1 after the date of the enactment of this ,act4