,i #aagth ,,congress #ast ,session ,h4 ,r4 #bhjh ,,in ,,the ,,house ,,of ,,representatives ,april #bb1 #bjba,mr4 ,rosendale 7for himself1 ,mr4 ,hice of ,georgia1 ,ms4 ,mace1 ,mr4 ,van ,drew1 ,ms4 ,herrell1 and ,mr4 ,cawthorn7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to make improvements to ,health ,savings ,accounts4 #a4 ,short title ,this ,act may be cited as the ,health ,freedom and ,flexibility ,act4 #b4 ,repeal of requirement to be enrolled in health plan 7a7 ,in general ,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 7b7 ,effective date ,the amendment made by this section shall apply to taxable years ending after the date of the enactment of this ,act4 #c4 ,repeal of limitations2 retention of denial of deduction to dependents 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 amendment ,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 7c7 ,effective date ,the amendments made by this section shall apply to taxable years ending after the date of the enactment of this ,act4 #d4 ,repeal of rules relating to eligible individual2 high deductible health plan 7a7 ,in general ,section #bbc of the ,internal ,revenue ,code of #aihf is 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 ,effective date ,the amendment made by this section shall apply to taxable years ending after the date of the enactment of this ,act4 #e4 ,health ,savings ,account 7a7 ,in general ,subparagraph 7,a7 of section #bbc7;c77#a7 of the ,internal ,revenue ,code of #aihf1 as amended by the preceding sections of this ,act1 is amended to read as follows3 7,a7 ,except in the case of a rollover contribution described in subsection 7e77#e7 or section #bbj7;f77#e71 no contribution will be accepted unless it is in cash4 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years ending after the date of the enactment of this ,act4 #f4 ,qualified medical expenses 7a7 ,repeal of purchase of health insurance limitation ,paragraph 7#b7 of section #bbc7;c7 of the ,internal ,revenue ,code of #aihf1 as redesignated by the preceding provisions of this ,act1 is amended to read as follows3 7#b7 ,qualified medical expenses 7,a7 ,in general ,the term qualified medical expenses means1 with respect to an account beneficiary1 amounts paid by such beneficiary for medical care 7as defined in section #bac7;d77 for such individual1 the spouse of such individual1 any dependent 7as defined in section #aeb1 determined without regard to subsections 7b77#a71 7b77#b71 and 7d77#a77;,b7 thereof7 of such individual1 but only to the extent such amounts are not compensated for by insurance or otherwise4 7,b7 ,menstrual care products ,for purposes of this paragraph-- 7i7 ,in general ,amounts paid for menstrual care products shall be treated as paid for medical care4 7ii7 ,definition ,the term menstrual care product means a tampon1 pad1 liner1 cup1 sponge1 or similar product used by individuals with respect to menstruation or other genital-tract secretions4 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years ending after the date of the enactment of this ,act4 #g4 ,allowance of distributions for prescription and over-the-counter medicines and drugs and other medically necessary items 7a7 ,h,s,as ,paragraph 7#b7 of section #bbc7;c7 of the ,internal ,revenue ,code of #aihf1 as redesignated by the preceding provisions of this ,act1 is amended by adding at the end the following3 7,c7 ,prescription and over-the-counter medicines and drugs and other medically necessary items ,for purposes of this paragraph-- 7i7 ,in general ,the term qualified medical expenses shall include an amount paid for any prescription or over-the-counter medicine or drug and medically necessary items4 7ii7 ,medically necessary items ,the term medically necessary item means any item for which a doctor or nurse certifies by a letter of medical necessity that the service or medication or item is for a medical diagnosis1 treatment1 or prevention of a medical diseases or condition4 4 7b7 ,effective date ,the amendment made by subsection 7a7 shall apply to amounts paid in taxable years ending after the date of the enactment of this ,act4 #h4 ,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 redesignated by the preceding sections of this ,act1 is amended by adding at the end the following new subparagraph3 7,d7 ,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 subsection 7a7 shall apply to taxable years ending after the date of the enactment of this ,act4 #i4 ,direct primary care2 exercise equipment2 dental care items 7a7 ,in general ,paragraph 7#b7 of section #bbc7;c7 of the ,internal ,revenue ,code of #aihf1 as amended by the preceding sections of this ,act1 is amended by adding at the end the following new subparagraph3 7,e7 ,direct primary care2 exercise equipment2 dental care items ,for purposes of this paragraph-- 7i7 ,in general ,the term qualified medical expenses shall include amounts paid-- 7,i7 amounts paid under a direct primary care service arrangement1 7,,ii7 amounts paid for exercise equipment1 and 7,,iii7 amounts paid for dental care items4 7ii7 ,direct primary care service arrangement ,the term #8direct primary care service arrangement' means1 with respect to any individual1 an arrangement under which such individual is provided medical care 7as defined in section #bac7;d77 consisting solely of primary care services provided by primary care practitioners 7as defined in section #ahcc7x77#b77;,a7 of the ,social ,security ,act1 determined without regard to clause 7ii7 thereof71 if the sole compensation for such care is a fixed periodic fee4 7iii7 ,exercise or fitness equipment ,the term exercise or fitness equipment means devices such as motorized treadmills1 stair climbers or step machines1 stationary bicycles1 rowing machines1 weight machines1 circuit training equipment1 cardiovascular equipment1 strength equipment1 or other similar equipment4 7iv7 ,dental care items ,the term dental care items includes manual or electric toothbrush1 dental floss1 and dental mouthwash4 4 7b7 ,effective date ,the amendment made by this section shall apply to plan years ending after the date of the enactment of this ,act4 #aj4 ,prohibition on use of funds for elective abortions 7a7 ,in general ,paragraph 7#b7 of section #bbc7;c7 of the ,internal ,revenue ,code of #aihf1 as amended by the preceding sections of this ,act1 is amended by adding at the end the following new subparagraph3 7,f7 ,prohibition on use of funds for elective abortions ,for purposes of this paragraph-- 7i7 ,payments for health insurance with abortion coverage ,the term qualified medical expenses shall not include amounts paid for insurance that includes coverage for abortions4 7ii7 ,payments ,for ,abortions ,the term qualified medical expense shall not include amounts paid for an abortion4 7iii7 ,abortion ,the term abortion means the use or prescription of any instrument1 medicine1 drug1 or any other substance or device-- 7,i7 to intentionally kill the unborn child of a woman known to be pregnant1 or 7,,ii7 to intentionally terminate the pregnancy of a woman known to be pregnant1 with an intention other than-- 7aa7 after viability1 to produce a live birth and preserve the life and health of the child born alive1 or 7bb7 to remove a dead unborn child4 4 7b7 ,effective date ,the amendment made by this section shall apply to plan years ending after the date of the enactment of this ,act4 #aa4 ,treatment after death if designated beneficiary is spouse or child of account beneficiary 7a7 ,in general ,subparagraph 7,a7 of section #bbc7;e77#g7 of the ,internal ,revenue ,code of #aihf1 as redesignated by the preceding sections of this ,act1 is amended to read as follows3 7,a7 ,treatment after death if designated beneficiary is spouse or child of account beneficiary ,if the account beneficiary's surviving spouse or child acquires such beneficiary's interest in a health savings account by reason of being the designated beneficiary of such account at the death of the account beneficiary1 such health savings account shall be treated as if the spouse or child 7as the case may be7 were the account beneficiary4 4 7b7 ,child defined ,paragraph 7#g7 of section #bbc7;e7 of such ,code1 as so redesignated1 is amended by adding at the end the following3 7,c7 ,child ,for purposes of this paragraph1 the term child means1 with respect to an account beneficiary1 an individual who bears a relationship to the account beneficiary described in section #aeb7;f77#a74 4 7c7 ,effective date ,the amendments made by this section shall apply with respect to account beneficiaries dying in taxable years ending after the date of the enactment of this ,act4 #ab4 ,administrative error correction before due date of return 7a7 ,in general ,paragraph 7#c7 of section #bbc7;d7 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,c7 ,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 #ac4 ,conforming amendments 7a7 ,section #bf7;b77#b7 of the ,internal ,revenue ,code of #aihf 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;e77#c74 7b7 ,section #ajf of such ,code is amended-- 7#a7 by amending subsection 7d77#a7 to read as follows3 7#a7 ,in general ,in the case of an employee1 amounts contributed by such employee's employer to any health savings account 7as defined in section #bbc7;c77 of such employee shall be treated as employer-provided coverage for medical expenses under an accident or health plan4 1 7#b7 in subsection 7e7-- 7,a7 by striking paragraphs 7#c7 and 7#d7 and 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 7c7 ,section #djh of such ,code is amended-- 7#a7 in subsection 7d77#i77;,a7 by striking who is an eligible individual 7as defined in section #bbc7;c77 and2 and 7#b7 in subsection 7d77#i77;,c7-- 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 7d7 ,section #hgg;,a7g77#f7 of such ,code is amended by striking #bbc7;f77#d7 and inserting #bbc7;e77#c74 7e7 ,section #digc of such ,code is amended by striking subsection 7g7 and by redesignating subsection 7h7 as subsection 7g74 7f7 ,section #dige of such ,code is amended-- 7#a7 in subsection 7c77#f7-- 7,a7 by striking section #bbc7;d7 and inserting section #bbc7;c71 and 7,b7 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 7g7 ,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 7h7 ,section #dihj;,g of such ,code is amended-- 7#a7 by amending ,subsection 7b7 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 1 and 7#b7 in subsection 7d7 by striking section #dihj;,e and inserting this section4 7i7 ,section #ffic7;a77#b77;,c7 of such ,code is amended by striking section #bbc7;h7 and inserting section #bbc7;f74