Freedom for Families Act

I 116TH CONGRESS 1ST SESSION H. R. 2163 To amend the Internal Revenue Code of 1986 to allow for tax-advantaged distributions from health savings accounts during family or medical leave, and for other purposes. IN THE HOUSE OF REPRESENTATIVES APRIL 9, 2019 Mr. BIGGS (for himself, Mr. MEADOWS, Mr. GAETZ, Mr. GOHMERT, Mr. GOSAR, Mr. WRIGHT, Mrs. LESKO, Mr. NORMAN, Mr. HICE of Georgia, Mr. JOYCE of Pennsylvania, Mr. WALKER, Mr. COLE, Mr. BUCK, and Mr. GROTHMAN) 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 allow for tax-advantaged distributions from health savings ac- counts during family or medical leave, 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. 3 This Act may be cited as the ‘‘Freedom for Families 4 Act’’. 5 VerDate Sep 11 2014 20:07 Apr 19, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2163.IH H2163 amozie on DSK9F9SC42PROD with BILLS 2 •HR 2163 IH SEC. 2. DISTRIBUTIONS FROM HEALTH SAVINGS ACCOUNTS 1 DURING PERIODS OF QUALIFIED CAREGIV- 2 ING. 3 (a) IN GENERAL.—Paragraphs (1) and (2) of section 4 223(f) of the Internal Revenue Code of 1986 are amended 5 to read as follows: 6 ‘‘(1) EXCLUSION OF AMOUNTS USED FOR 7 QUALIFIED MEDICAL EXPENSES OR DISTRIBUTED 8 DURING PERIODS OF QUALIFIED CAREGIVING.—Any 9 amount paid or distributed out of a health savings 10 account shall not be includible in gross income if it 11 is— 12 ‘‘(A) used exclusively to pay qualified med- 13 ical expenses of any account beneficiary, or 14 ‘‘(B) paid or distributed during a period of 15 qualified caregiving. 16 ‘‘(2) INCLUSION OF AMOUNTS NEITHER USED 17 FOR QUALIFIED MEDICAL EXPENSES NOR DISTRIB- 18 UTED DURING PERIODS OF QUALIFIED 19 CAREGIVING.—Any amount paid or distributed out 20 of a health savings account shall be included in the 21 gross income of the account beneficiary if it is not 22 described in paragraph (1).’’. 23 (b) DEFINITION OF PERIOD OF QUALIFIED 24 CAREGIVING.—Section 223(f) of the Internal Revenue 25 VerDate Sep 11 2014 20:07 Apr 19, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2163.IH H2163 amozie on DSK9F9SC42PROD with BILLS 3 •HR 2163 IH Code of 1986 is amended by adding at the end the 1 following new subsection: 2 ‘‘(9) PERIOD OF QUALIFIED CAREGIVING.—For pur- 3 poses of this section, the term ‘period of qualified 4 caregiving’ means any period during which an individual 5 is on leave or not employed by reason of a situation de- 6 scribed in subparagraphs (A) through (E) of section 7 102(a)(1) of the Family and Medical Leave Act of 1993.’’. 8 (c) CONFORMING AMENDMENTS.— 9 (1) Section 223(d)(1) of such Code is amended 10 by inserting ‘‘or the expenses incurred during a pe- 11 riod of qualified caregiving of the account bene- 12 ficiary’’. 13 (2) Section 223(f)(4) of such Code is amended 14 in the heading by striking ‘‘DISTRIBUTIONS NOT 15 USED FOR QUALIFIED MEDICAL EXPENSES’’ and in- 16 serting ‘‘CERTAIN DISTRIBUTIONS’’. 17 (d) EFFECTIVE DATE.—The amendments made by 18 this section shall apply with respect to taxable years begin- 19 ning after the date of the enactment of this Act. 20 SEC. 3. NO HIGH DEDUCTIBLE HEALTH PLAN REQUIRED 21 FOR HEALTH SAVINGS ACCOUNTS. 22 (a) IN GENERAL.—Section 223(a) of the Internal 23 Revenue Code of 1986 is amended by striking ‘‘who is an 24 eligible individual for any month during the taxable year’’. 25 VerDate Sep 11 2014 20:07 Apr 19, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2163.IH H2163 amozie on DSK9F9SC42PROD with BILLS 4 •HR 2163 IH (b) CONFORMING AMENDMENTS.— 1 (1) Section 223(b) of such Code is amended by 2 striking paragraphs (7) and (8). 3 (2) Section 223 of such Code is amended by 4 striking subsection (c). 5 (c) INCREASE IN CONTRIBUTION LIMIT FOR HEALTH 6 SAVINGS ACCOUNTS.— 7 (1) IN GENERAL.—Section 223(b)(1) of the In- 8 ternal Revenue Code of 1986 is amended by striking 9 ‘‘the sum of the monthly’’ and all that follows 10 through ‘‘eligible individual’’ and inserting ‘‘$9,000 11 (twice such amount in the case of a joint return)’’. 12 (2) CONFORMING AMENDMENTS.— 13 (A) Section 223(b) of such Code is amend- 14 ed by striking paragraphs (2), (3), and (5) and 15 by redesignating paragraphs (4) and (6) as 16 paragraphs (2) and (3), respectively. 17 (B) Section 223(b)(2) of such Code (as re- 18 designated by subparagraph (A)) is amended by 19 striking the last sentence. 20 (C) Section 223(d)(1)(A)(ii) is amended by 21 striking ‘‘the sum of’’ and all that follows 22 through the period at the end and inserting 23 ‘‘the dollar amount in effect under subsection 24 (b)(1).’’. 25 VerDate Sep 11 2014 20:07 Apr 19, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2163.IH H2163 amozie on DSK9F9SC42PROD with BILLS 5 •HR 2163 IH (D) Section 223(g)(1) of such Code is 1 amended— 2 (i) by striking ‘‘Each dollar amount in 3 subsections (b)(2) and (c)(2)(A)’’ and in- 4 serting ‘‘The dollar amount in subsection 5 (b)(1)’’; 6 (ii) by striking ‘‘thereof’’ and all that 7 follows through ‘‘ ‘calendar year 2003’.’’ 8 and inserting ‘‘ ‘calendar year 1997’.’’; and 9 (iii) by striking ‘‘under subsections 10 (b)(2) and (c)(2)(A)’’ and inserting ‘‘under 11 subsection (b)(1)’’. 12 (d) EFFECTIVE DATE.—The amendments made by 13 this section shall apply with respect to months in taxable 14 years beginning after the date of the enactment of this 15 Act. 16 Æ VerDate Sep 11 2014 20:07 Apr 19, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\H2163.IH H2163 amozie on DSK9F9SC42PROD with BILLS