Health Savings Act of 2021

II 117TH CONGRESS 1ST SESSION S. 380 To amend the Internal Revenue Code of 1986 to improve access to health care through expanded health savings accounts, and for other purposes. IN THE SENATE OF THE UNITED STATES FEBRUARY 23, 2021 Mr. RUBIO (for himself and Mr. SCOTT of South Carolina) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to improve access to health care through expanded health savings accounts, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE, ETC. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Health Savings Act of 2021’’. 5 (b) AMENDMENT OF 1986 CODE.—Except as other- 6 wise expressly provided, whenever in this Act an amend- 7 ment or repeal is expressed in terms of an amendment 8 to, or repeal of, a section or other provision, the reference 9 VerDate Sep 11 2014 23:33 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S380.IS S380 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 380 IS shall be considered to be made to a section or other provi- 1 sion of the Internal Revenue Code of 1986. 2 (c) TABLE OF CONTENTS.—The table of contents is 3 as follows: 4 Sec. 1. Short title, etc. TITLE I—RENAMING HIGH DEDUCTIBLE HEALTH PLANS Sec. 101. High deductible health plans renamed HSA-qualified health plans. TITLE II—ENHANCING ACCESS TO TAX-PREFERRED HEALTH ACCOUNTS Sec. 201. Allow both spouses to make catch-up contributions to the same HSA account. Sec. 202. Provisions relating to Medicare. Sec. 203. Individuals eligible for Indian Health Service assistance. Sec. 204. Members of health care sharing ministries eligible to establish health savings accounts. Sec. 205. Treatment of direct primary care service arrangements. Sec. 206. Individuals eligible for on-site medical clinic coverage. Sec. 207. Treatment of embedded deductibles. TITLE III—IMPROVING COVERAGE UNDER TAX-PREFERRED HEALTH ACCOUNTS Sec. 301. Purchase of health insurance from HSA account. Sec. 302. Special rule for certain medical expenses incurred before establish- ment of account. Sec. 303. Preventive care prescription drug clarification. TITLE IV—MISCELLANEOUS PROVISIONS RELATING TO TAX- PREFERRED HEALTH ACCOUNTS Sec. 401. FSA and HRA interaction with HSAs. Sec. 402. Equivalent bankruptcy protections for health savings accounts as re- tirement funds. Sec. 403. Administrative error correction before due date of return. Sec. 404. Reauthorization of Medicaid health opportunity accounts. Sec. 405. Maximum contribution limit to health savings account increased to amount of deductible and out-of-pocket limitation. TITLE V—OTHER PROVISIONS Sec. 501. Certain exercise equipment and physical fitness programs treated as medical care. Sec. 502. Certain nutritional and dietary supplements to be treated as medical care. Sec. 503. Certain provider fees to be treated as medical care. VerDate Sep 11 2014 23:33 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6211 E:\BILLS\S380.IS S380 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 380 IS TITLE I—RENAMING HIGH 1 DEDUCTIBLE HEALTH PLANS 2 SEC. 101. HIGH DEDUCTIBLE HEALTH PLANS RENAMED 3 HSA-QUALIFIED HEALTH PLANS. 4 (a) IN GENERAL.—Section 223 is amended by strik- 5 ing ‘‘high deductible health plan’’ each place it appears 6 and inserting ‘‘HSA-qualified health plan’’. 7 (b) CONFORMING AMENDMENTS.— 8 (1) The heading for paragraph (2) of section 9 223(c) is amended by striking ‘‘HIGH DEDUCTIBLE 10 HEALTH PLAN’’ and inserting ‘‘HSA-QUALIFIED 11 HEALTH PLAN’’. 12 (2) Section 408(d)(9) is amended— 13 (A) by striking ‘‘high deductible health 14 plan’’ each place it appears in subparagraph 15 (C) and inserting ‘‘HSA-qualified health plan’’; 16 and 17 (B) by striking ‘‘HIGH DEDUCTIBLE 18 HEALTH PLAN’’ in the heading of subparagraph 19 (D) and inserting ‘‘HSA-QUALIFIED HEALTH 20 PLAN’’. 21 (3) Section 106(e) is amended— 22 (A) by striking ‘‘HIGH DEDUCTIBLE 23 HEALTH PLAN’’ in the heading of paragraph (3) 24 VerDate Sep 11 2014 23:33 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S380.IS S380 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 380 IS and inserting ‘‘HSA-QUALIFIED HEALTH 1 PLAN’’; and 2 (B) by striking ‘‘high deductible health 3 plan’’ in paragraph (5)(B)(iii) and inserting 4 ‘‘HSA-qualified health plan’’. 5 TITLE II—ENHANCING ACCESS 6 TO TAX-PREFERRED HEALTH 7 ACCOUNTS 8 SEC. 201. ALLOW BOTH SPOUSES TO MAKE CATCH-UP CON- 9 TRIBUTIONS TO THE SAME HSA ACCOUNT. 10 (a) IN GENERAL.—Paragraph (5) of section 223(b) 11 is amended to read as follows: 12 ‘‘(5) SPECIAL RULE FOR MARRIED INDIVIDUALS 13 WITH FAMILY COVERAGE.— 14 ‘‘(A) IN GENERAL.—In the case of individ- 15 uals who are married to each other, if both 16 spouses are eligible individuals and either 17 spouse has family coverage under an HSA- 18 qualified health plan as of the first day of any 19 month— 20 ‘‘(i) the limitation under paragraph 21 (1) shall be applied by not taking into ac- 22 count any other HSA-qualified health plan 23 coverage of either spouse (and if such 24 spouses both have family coverage under 25 VerDate Sep 11 2014 23:33 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S380.IS S380 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 380 IS separate HSA-qualified health plans, only 1 one such coverage shall be taken into ac- 2 count), 3 ‘‘(ii) such limitation (after application 4 of clause (i)) shall be reduced by the ag- 5 gregate amount paid to Archer MSAs of 6 such spouses for the taxable year, and 7 ‘‘(iii) such limitation (after application 8 of clauses (i) and (ii)) shall be divided 9 equally between such spouses unless they 10 agree on a different division. 11 ‘‘(B) TREATMENT OF ADDITIONAL CON- 12 TRIBUTION AMOUNTS.—If both spouses referred 13 to in subparagraph (A) have attained age 55 14 before the close of the taxable year, the limita- 15 tion referred to in subparagraph (A)(iii) which 16 is subject to division between the spouses shall 17 include the additional contribution amounts de- 18 termined under paragraph (3) for both spouses. 19 In any other case, any additional contribution 20 amount determined under paragraph (3) shall 21 not be taken into account under subparagraph 22 (A)(iii) and shall not be subject to division be- 23 tween the spouses.’’. 24 VerDate Sep 11 2014 23:33 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S380.IS S380 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 380 IS (b) EFFECTIVE DATE.—The amendment made by 1 this section shall apply to taxable years beginning after 2 the date of the enactment of this Act. 3 SEC. 202. PROVISIONS RELATING TO MEDICARE. 4 (a) INDIVIDUALS OVER AGE 65 ONLY ENROLLED IN 5 MEDICARE PART A.—Paragraph (7) of section 223(b) is 6 amended by adding at the end the following: ‘‘This para- 7 graph shall not apply to any individual during any period 8 for which the individual’s only entitlement to such benefits 9 is an entitlement to hospital insurance benefits under part 10 A of title XVIII of such Act pursuant to an enrollment 11 for such hospital insurance benefits under section 226(a) 12 of such Act.’’. 13 (b) MEDICARE BENEFICIARIES PARTICIPATING IN 14 MEDICARE ADVANTAGE MSA MAY CONTRIBUTE THEIR 15 OWN MONEY TO THEIR MSA.— 16 (1) IN GENERAL.—Subsection (b) of section 17 138 is amended by striking paragraph (2) and by re- 18 designating paragraphs (3) and (4) as paragraphs 19 (2) and (3), respectively. 20 (2) CONFORMING AMENDMENT.—Paragraph (4) 21 of section 138(c) is amended by striking ‘‘and para- 22 graph (2)’’. 23 VerDate Sep 11 2014 23:33 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S380.IS S380 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 380 IS (c) EFFECTIVE DATE.—The amendments made by 1 this section shall apply to taxable years beginning after 2 the date of the enactment of this Act. 3 SEC. 203. INDIVIDUALS ELIGIBLE FOR INDIAN HEALTH 4 SERVICE ASSISTANCE. 5 (a) IN GENERAL.—Paragraph (1) of section 223(c), 6 as amended by section 102(c)(4) of the No Surprises Act, 7 is amended by adding at the end the following new sub- 8 paragraph: 9 ‘‘(E) SPECIAL RULE FOR INDIVIDUALS EL- 10 IGIBLE FOR ASSISTANCE UNDER INDIAN 11 HEALTH SERVICE PROGRAMS.—For purposes of 12 subparagraph (A)(ii), an individual shall not be 13 treated as covered under a health plan de- 14 scribed in such subparagraph merely because 15 the individual receives hospital care or medical 16 services under a medical care program of the 17 Indian Health Service or of a tribal organiza- 18 tion.’’. 19 (b) EFFECTIVE DATE.—The amendment made by 20 this section shall apply to taxable years beginning after 21 the date of the enactment of this Act. 22 VerDate Sep 11 2014 23:33 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S380.IS S380 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 380 IS SEC. 204. MEMBERS OF HEALTH CARE SHARING MIN- 1 ISTRIES ELIGIBLE TO ESTABLISH HEALTH 2 SAVINGS ACCOUNTS. 3 (a) IN GENERAL.—Section 223 is amended by adding 4 at the end the following new subsection: 5 ‘‘(i) APPLICATION TO HEALTH CARE SHARING MIN- 6 ISTRIES.—For purposes of this section, membership in a 7 health care sharing ministry (as defined in section 8 5000A(d)(2)(B)(ii)) shall be treated as coverage under an 9 HSA-qualified health plan.’’. 10 (b) EFFECTIVE DATE.—The amendment made by 11 this section shall apply to taxable years beginning after 12 the date of the enactment of this Act. 13 SEC. 205. TREATMENT OF DIRECT PRIMARY CARE SERVICE 14 ARRANGEMENTS. 15 (a) IN GENERAL.—Section 223(c) is amended by 16 adding at the end the following new paragraph: 17 ‘‘(6) TREATMENT OF DIRECT PRIMARY CARE 18 SERVICE ARRANGEMENTS.—An arrangement under 19 which an individual is provided coverage restricted to 20 primary care services in exchange for a fixed peri- 21 odic fee or payment for primary care services— 22 ‘‘(A) shall not be treated as a health plan 23 for purposes of paragraph (1)(A)(ii), and 24 ‘‘(B) shall not be treated as insurance for 25 purposes of subsection (d)(2)(B).’’. 26 VerDate Sep 11 2014 23:33 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S380.IS S380 pbinns on DSKJLVW7X2PROD with BILLS 9 •S 380 IS (b) EFFECTIVE DATE.—The amendment made by 1 this section shall apply to taxable years beginning after 2 the date of the enactment of this Act. 3 SEC. 206. INDIVIDUALS ELIGIBLE FOR ON-SITE MEDICAL 4 CLINIC COVERAGE. 5 (a) IN GENERAL.—Paragraph (1) of section 223(c), 6 as amended by sections 203, is amended by adding at the 7 end the following new subparagraph: 8 ‘‘(F) SPECIAL RULE FOR INDIVIDUALS EL- 9 IGIBLE FOR ON-SITE MEDICAL CLINIC COV- 10 ERAGE.— 11 ‘‘(i) IN GENERAL.—For purposes of 12 subparagraph (A)(ii), an individual shall 13 not be treated as covered under a health 14 plan described in such subparagraph mere- 15 ly because the individual is eligible to re- 16 ceive health care benefits from an on-site 17 medical clinic of the employer of the indi- 18 vidual or the individual’s spouse if such 19 health care benefits are not significant 20 benefits. 21 ‘‘(ii) INCLUDED BENEFITS.—For pur- 22 poses of clause (i), the following health 23 care benefits shall be considered to be ben- 24 efits which are not significant benefits: 25 VerDate Sep 11 2014 23:33 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S380.IS S380 pbinns on DSKJLVW7X2PROD with BILLS 10 •S 380 IS ‘‘(I) Physicals and immuniza- 1 tions. 2 ‘‘(II) Injecting antigens provided 3 by employees. 4 ‘‘(III) Medications available with- 5 out a prescription, such as pain reliev- 6 ers and antihistamines. 7 ‘‘(IV) Treatment for injuries oc- 8 curring at the employer’s place of em- 9 ployment or otherwise in the course of 10 employment. 11 ‘‘(V) Tests for infectious diseases 12 and conditions, such as streptococcal 13 sore throat. 14 ‘‘(VI) Monitoring of chronic con- 15 ditions, such as diabetes. 16 ‘‘(VII) Drug testing. 17 ‘‘(VIII) Hearing or vision 18 screenings and related services. 19 ‘‘(IX) Other services and treat- 20 ments of a similar nature to the serv- 21 ices described in subclauses (I) 22 through (VIII). 23 ‘‘(iii) AGGREGATION RULES.—For 24 purposes of clause (i), all persons treated 25 VerDate Sep 11 2014 23:33 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S380.IS S380 pbinns on DSKJLVW7X2PROD with BILLS 11 •S 380 IS as a single employer under subsection (b), 1 (c), (m), or (o) of section 414 shall be 2 treated as a single employer.’’. 3 (b) EFFECTIVE DATE.—The amendment made by 4 this section shall apply to taxable years beginning after 5 the date of the enactment of this Act. 6 SEC. 207. TREATMENT OF EMBEDDED DEDUCTIBLES. 7 (a) IN GENERAL.—Paragraph (2) of section 223(c), 8 as amended by section 102(c)(4) of the No Surprises Act, 9 is amended by adding at the end the following new sub- 10 paragraph: 11 ‘‘(G) TREATMENT OF EMBEDDED DEDUCT- 12 IBLE.—A health plan providing family coverage 13 that has an annual deductible for all covered in- 14 dividuals under the plan of at least the amount 15 described in subparagraph (A)(i)(II) shall not 16 fail to be treated as an HSA-qualified health 17 plan solely because it covers expenses with re- 18 spect to an individual under that plan that ex- 19 ceed an embedded deductible which is equal to 20 or in excess of the amount described in sub- 21 paragraph (A)(i)(I).’’. 22 (b) EFFECTIVE DATE.—The amendment made by 23 this section shall apply to taxable years beginning after 24 the date of the enactment of this Act. 25 VerDate Sep 11 2014 23:33 Mar 04, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S380.IS S380 pbinns on DSKJLVW7X2PROD with BILLS 12 •S 380 IS TITLE III—IMPROVING COV- 1 ERAGE UNDER TAX-PRE- 2 FERRED HEALTH ACCOUNTS 3 SEC. 301. PURCHASE OF HEALTH INSURANCE FROM HSA 4 ACCOUNT. 5 (a) IN GENERAL.—Paragraph (2) of section 223(d) 6 is amended— 7 (1) by striking ‘‘and any dependent (as defined 8 in section 152, determined without regard to sub- 9 sections (b)(1), (b)(2), and (d)(1)(B) thereof) of 10 such individual’’ in subparagraph (A) and inserting 11 ‘‘any dependent (as defined in section 152, deter- 12 mined without regard to subsections (b)(1), (b)(2), 13 and (d)(1)(B) thereof) of such individual, and any 14 child (as defined in section 152(f)(1)) of such indi- 15 vidual who has not attained the age of 27 before the 16 end of such individual’s taxable year’’; 17 (2) by striking subparagraph (B) and inserting 18 the following: 19 ‘‘(B) HEALTH INSURANCE MAY NOT BE 20 PURCHASED FROM ACCOUNT.—Except as pro- 21 vided in subparagrap [Text truncated for display. Full text available on Congress.gov.]