[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 548 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 548
To amend the Internal Revenue Code of 1986 to modernize health savings
accounts.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 16, 2025
Ms. Van Duyne (for herself, Mr. Crenshaw, and Mr. Meuser) 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 modernize health savings
accounts.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``HSA Modernization Act''.
SEC. 2. INDIVIDUALS WITHOUT SERVICE-CONNECTED DISABILITY AND ELIGIBLE
FOR CERTAIN VETERANS BENEFITS PERMITTED TO CONTRIBUTE TO
HEALTH SAVINGS ACCOUNTS.
(a) In General.--Section 223(c)(1)(C) of the Internal Revenue Code
of 1986 is amended by striking ``for a service-connected disability
(within the meaning of section 101(16) of title 38, United States
Code)''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2025.
SEC. 3. INDIVIDUALS ENTITLED TO PART A OF MEDICARE BY REASON OF AGE
ALLOWED TO CONTRIBUTE TO HEALTH SAVINGS ACCOUNTS.
(a) In General.--Section 223(c)(1)(B) of the Internal Revenue Code
of 1986 is amended by striking ``and'' at the end of clause (ii), by
striking the period at the end of clause (iii) and inserting ``, and'',
and by adding at the end the following new clause:
``(iv) entitlement to hospital insurance
benefits under part A of title XVIII of the
Social Security Act by reason of section 226(a)
of such Act.''.
(b) Treatment of Health Insurance Purchased From Account.--Section
223(d)(2)(C)(iv) of such Code is amended by inserting ``and who is not
an eligible individual'' after ``who has attained the age specified in
section 1811 of the Social Security Act''.
(c) Coordination With Penalty on Distributions Not Used for
Qualified Medical Expenses.--Section 223(f)(4)(C) of such Code is
amended by striking ``Subparagraph (A)'' and inserting ``Except in the
case of an eligible individual, subparagraph (A)''
(d) Conforming Amendment.--Section 223(b)(7) of such Code is
amended by inserting ``(other than an entitlement to benefits described
in subsection (c)(1)(B)(iv))'' after ``Social Security Act''.
(e) Effective Date.--The amendments made by this section shall
apply to months beginning after December 31, 2025, in taxable years
ending after such date.
SEC. 4. INDIVIDUALS ELIGIBLE FOR INDIAN HEALTH SERVICE ASSISTANCE NOT
DISQUALIFIED FROM HEALTH SAVINGS ACCOUNTS.
(a) In General.--Section 223(c)(1) of the Internal Revenue Code of
1986 is amended by adding at the end the following new subparagraph:
``(E) Special rule for individuals eligible for
assistance under indian health service programs.--For
purposes of subparagraph (A)(ii), an individual shall
not be treated as covered under a health plan described
in such subparagraph merely because the individual
receives hospital care or medical services under a
medical care program of the Indian Health Service or of
a tribal organization.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2025.
SEC. 5. ALLOWANCE OF BRONZE AND CATASTROPHIC PLANS IN CONNECTION WITH
HEALTH SAVINGS ACCOUNTS.
(a) In General.--Section 223(c)(2) of the Internal Revenue Code of
1986 is amended by adding at the end the following new subparagraph:
``(H) Bronze and catastrophic plans treated as high
deductible health plans.--The term `high deductible
health plan' shall include any plan described in
subsection (d)(1)(A) or (e) of section 1302 of the
Patient Protection and Affordable Care Act.''.
(b) Effective Date.--The amendment made by this section shall apply
to months beginning after December 31, 2025, in taxable years ending
after such date.
SEC. 6. SAFE HARBOR FOR ABSENCE OF DEDUCTIBLE FOR MENTAL HEALTH
SERVICES.
(a) In General.--Section 223(c)(2) of the Internal Revenue Code of
1986, as amended by this Act, is amended by adding at the end the
following new subparagraph:
``(I) Safe harbor for absence of deductible for
mental health services.--A plan shall not fail to be
treated as a high deductible health plan by reason of
failing to have a deductible for not more than the
first $500 of any mental health benefits (as defined in
section 9812(e)(4)) specified by the plan for purposes
of this subparagraph.''.
(b) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2025.
SEC. 7. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES INCURRED BEFORE
ESTABLISHMENT OF HEALTH SAVINGS ACCOUNT.
(a) In General.--Section 223(d)(2) of the Internal Revenue Code of
1986 is amended by adding at the end the following new subparagraph:
``(E) Treatment of certain medical expenses
incurred before establishment of account.--If a health
savings account is established during the 60-day period
beginning on the date that coverage of the account
beneficiary under a high deductible health plan begins,
then, solely for purposes of determining whether an
amount paid is used for a qualified medical expense,
such account shall be treated as having been
established on the date that such coverage begins.''.
(b) Effective Date.--The amendment made by this section shall apply
with respect to coverage beginning after December 31, 2025.
SEC. 8. ALLOW BOTH SPOUSES TO MAKE CATCH-UP CONTRIBUTIONS TO THE SAME
HEALTH SAVINGS ACCOUNT.
(a) In General.--Section 223(b)(5) of the Internal Revenue Code of
1986 is amended to read as follows:
``(5) Special rule for married individuals with family
coverage.--
``(A) In general.--In the case of individuals who
are married to each other, if both spouses are eligible
individuals and either spouse has family coverage under
a high deductible health plan as of the first day of
any month--
``(i) the limitation under paragraph (1)
shall be applied by not taking into account any
other high deductible health plan coverage of
either spouse (and if such spouses both have
family coverage under separate high deductible
health plans, only one such coverage shall be
taken into account),
``(ii) such limitation (after application
of clause (i)) shall be reduced by the
aggregate amount paid to Archer MSAs of such
spouses for the taxable year, and
``(iii) such limitation (after application
of clauses (i) and (ii)) shall be divided
equally between such spouses unless they agree
on a different division.
``(B) Treatment of additional contribution
amounts.--If both spouses referred to in subparagraph
(A) have attained age 55 before the close of the
taxable year, the limitation referred to in
subparagraph (A)(iii) which is subject to division
between the spouses shall include the additional
contribution amounts determined under paragraph (3) for
both spouses. In any other case, any additional
contribution amount determined under paragraph (3)
shall not be taken into account under subparagraph
(A)(iii) and shall not be subject to division between
the spouses.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2025.
SEC. 9. MAXIMUM CONTRIBUTION LIMIT TO HEALTH SAVINGS ACCOUNT INCREASED
TO AMOUNT OF DEDUCTIBLE AND OUT-OF-POCKET LIMITATION.
(a) Self-Only Coverage.--Section 223(b)(2)(A) of the Internal
Revenue Code of 1986 is amended by striking ``$2,250'' and inserting
``the amount in effect under subsection (c)(2)(A)(ii)(I)''.
(b) Family Coverage.--Section 223(b)(2)(B) of such Code is amended
by striking ``$4,500'' and inserting ``the amount in effect under
subsection (c)(2)(A)(ii)(II)''.
(c) Conforming Amendments.--Section 223(g)(1) of such Code is
amended--
(1) by striking ``subsections (b)(2) and'' both places it
appears and inserting ``subsection'', and
(2) in subparagraph (B), by striking ``determined by'' and
all that follows through ```calendar year 2003'.'' and
inserting ``determined by substituting `calendar year 2003' for
`calendar year 2016' in subparagraph (A)(ii) thereof.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2025.
SEC. 10. CLARIFICATION OF TREATMENT OF DISTRIBUTIONS FROM HEALTH
SAVINGS ACCOUNT FOR LONG-TERM CARE SERVICES.
(a) In General.--Section 223(d)(2)(A) of the Internal Revenue Code
of 1986 is amended by inserting before the last sentence the following:
``Such term includes amounts paid for qualified long-term care services
(as defined in section 7702B(c)).''.
(b) Effective Date.--The amendment made by this section shall apply
to amounts paid after the date of the enactment of this Act.
(c) No Inference.--Nothing contained in this section or the
amendment made thereby shall be construed to create any inference with
respect to any amounts paid on or before such date.
<all>