What This Bill Does
This bill changes the rules for health savings accounts by renaming them "health freedom accounts" and allowing more people to use them. The bill removes requirements that currently limit who can open these accounts and increases how much money people can put into them each year.
Who It Affects
Individuals who want to save money for health care costs. Employers who hire workers. Employees hired by employers starting 5 years after this law passes.
Key Provisions
* Anyone can now open and contribute money to a health freedom account, removing the current requirement that you must have certain types of health insurance first (Sec. 2(b))
* Health freedom accounts can now pay for direct primary care, health care sharing ministries, and medical cost sharing organizations, which were not previously allowed (Sec. 2(c))
* The maximum amount people can contribute each year increases to $12,000 (or $24,000 for married couples filing jointly) (Sec. 2(e))
* People age 55 or older can contribute an additional $5,000 per year (Sec. 2(f)(2))
* Employees hired 5 years or more after this law passes can receive employer contributions to health freedom accounts without paying taxes on that money (Sec. 3(a)(1))
What Changes
If this becomes law, health savings accounts will be renamed health freedom accounts. More people will be eligible to use them without needing specific health insurance coverage first. The accounts can pay for new types of health care services. Annual contribution limits will increase significantly. Employers will not have to provide traditional health insurance coverage for employees hired 5 years after the law passes, and can instead contribute to their health freedom accounts.
Important Definitions
Health freedom accounts: accounts where individuals can save money to pay for qualified medical expenses (the bill does not define "qualified medical expenses" beyond stating it now includes direct primary care, health care sharing ministries, and medical cost sharing organizations).
Effective Date
The changes apply to months in tax years beginning after this bill becomes law (Sec. 2(g)). The employer contribution rules apply to employees hired on or after the date that is 5 years after this bill becomes law (Sec. 3(a)(4)).
I
118TH CONGRESS
1ST SESSION H. R. 1769
To amend the Internal Revenue Code of 1986 to create health freedom
accounts available to all individuals.
IN THE HOUSE OF REPRESENTATIVES
MARCH 23, 2023
Mr. ROY (for himself, Mr. WEBER of Texas, Mr. GREEN of Tennessee, Mr.
ROSENDALE, Ms. GREENE of Georgia, Mrs. BOEBERT, and Mr. GOOD of
Virginia) introduced the following bill; which was referred to the Com-
mittee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to create
health freedom accounts available to all individuals.
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 ‘‘Healthcare Freedom
4
Act of 2023’’.
5
SEC. 2. HEALTH FREEDOM ACCOUNTS.
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(a) IN GENERAL.—Section 223 of the Internal Rev-
7
enue Code of 1986 is amended by striking ‘‘health savings
8
account’’ and ‘‘health savings accounts’’ each place such
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•HR 1769 IH
terms appear and inserting ‘‘health freedom account’’ and
1
‘‘health freedom accounts’’, respectively.
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(b) ALL INDIVIDUALS ALLOWED DEDUCTIONS FOR
3
CONTRIBUTIONS.—Section 223(a) of the Internal Revenue
4
Code of 1986 is amended by striking ‘‘who is an eligible
5
individual for any month during the taxable year’’.
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(c) NO LIMITATION ON PURCHASING HEALTH COV-
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ERAGE FROM HEALTH FREEDOM ACCOUNTS.—Section
8
223(d)(2) of the Internal Revenue Code of 1986 is amend-
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ed by striking subparagraphs (B) and (C) and the last
10
sentence of subparagraph (A) and by adding at the end
11
the following new subsection:
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‘‘(B) ADDITIONAL EXPENSES.—The term
13
‘qualified medical expenses’ includes costs asso-
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ciated with direct primary care, health care
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sharing ministries, and medical cost sharing or-
16
ganizations.’’.
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(d) TRANSFERS
ALLOWED
TO
OTHER
HEALTH
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FREEDOM ACCOUNTS.—Section 223(f)(5) of the Internal
19
Revenue Code of 1986 is amended to read as follows:
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‘‘(5) ROLLOVER
CONTRIBUTION.—An amount
21
paid or distributed from a health freedom account is
22
a rollover contribution to the extent the amount re-
23
ceived is paid into any other health freedom account
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•HR 1769 IH
not later than the 60th day after the date of such
1
payment or distribution.’’.
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(e) INCREASE IN CONTRIBUTION LIMITS.—Section
3
223(b)(1) of such Code is amended by striking ‘‘the sum
4
of the monthly’’ and all that follows through ‘‘eligible indi-
5
vidual’’ and inserting ‘‘$12,000 (twice such amount in the
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case of a joint return)’’.
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(f) CONFORMING AMENDMENTS.—
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(1) Section 223(b) of such Code is amended by
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striking paragraphs (2), (5), (7), and (8) and by re-
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designating paragraphs (3), (4), and (6) as para-
11
graphs (2), (3), and (4), respectively.
12
(2) Section 223(b)(2) of such Code (as redesig-
13
nated by paragraph (2)) is amended to read as fol-
14
lows:
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‘‘(2) ADDITIONAL
CONTRIBUTIONS
FOR
INDI-
16
VIDUALS 55 OR OLDER.—In the case of an individual
17
who has attained age 55 before the close of the tax-
18
able year, the limitation under paragraph (1) shall
19
be increased by $5,000.’’.
20
(3) Section 223(b)(3) of such Code (as redesig-
21
nated by subparagraph (A)) is amended by striking
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the last sentence.
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(4) Section 223 of such Code is amended by
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striking subsection (c).
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•HR 1769 IH
(5) Section 223(d)(1)(A) of such Code is
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amended by striking ‘‘will be accepted’’ and all that
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follows through the period at the end and inserting
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‘‘will be accepted unless it is in cash.’’.
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(6) Section 223(f) of such Code is amended by
5
striking paragraphs (7) and (8).
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(7) Section 223(g)(1) of such Code is amend-
7
ed—
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(A) by striking ‘‘Each dollar amount in
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subsections (b)(2) and (c)(2)(A)’’ and inserting
10
‘‘The dollar amount in subsection (b)(1)’’;
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(B) by striking ‘‘thereof’’ and all that fol-
12
lows in subparagraph (B) through ‘‘ ‘calendar
13
year 2003’.’’ and inserting ‘‘ ‘calendar year
14
1997’.’’; and
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(C) by striking ‘‘under subsections (b)(2)
16
and (c)(2)(A)’’ and inserting ‘‘under subsection
17
(b)(1)’’.
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(8) The table of sections for part VII of sub-
19
chapter B of chapter 1 of the Internal Revenue Code
20
of 1986 is amended in the item relating to section
21
223 by striking ‘‘savings’’ and inserting ‘‘freedom’’.
22
(g) EFFECTIVE DATE.—The amendments made by
23
this section shall apply with respect to months in taxable
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•HR 1769 IH
years beginning after the date of the enactment of this
1
Act.
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SEC. 3. EXCLUSION FOR EMPLOYER CONTRIBUTIONS TO
3
HEALTH FREEDOM ACCOUNTS.
4
(a) EMPLOYER EXCLUSION.—
5
(1) IN GENERAL.—The Internal Revenue Code
6
of 1986 is amended by inserting after section 106
7
the following new section:
8
‘‘SEC. 106A. CONTRIBUTIONS BY EMPLOYERS TO HEALTH
9
FREEDOM ACCOUNTS.
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‘‘In the case of any employee hired by an employer
11
on or after the date that is 5 years after the date of the
12
enactment of this section, gross income of such employee
13
does not include amounts contributed by such employer
14
to a health freedom account of such employee.’’.
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(2) EXCLUSION FOR CONTRIBUTIONS BY EM-
16
PLOYER TO ACCIDENT AND HEALTH PLANS.—Sec-
17
tion 106 of such Code is amended by adding at the
18
end the following new subsection:
19
‘‘(h) TERMINATION.—In the case of any employee
20
hired by an employer on or after the date that is 5 years
21
after the date of the enactment of this section, this section
22
shall not apply to coverage provided by such employer with
23
respect to such employee.’’.
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•HR 1769 IH
(3) CONFORMING AMENDMENT.—The table of
1
sections for part III of subchapter B of chapter 1
2
of such Code is amended by striking the item relat-
3
ing to section 106 and inserting the following:
4
‘‘Sec. 106A. Contributions by employers to health freedom accounts.’’.
(4) EFFECTIVE DATE.—The amendments made
5
by this subsection shall apply with respect to em-
6
ployees hired on or after the date that is 5 years
7
after the date of the enactment of this Act.
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(b) TRANSITION RULE.—
9
(1) IN GENERAL.—Section 106(d)(1) of the In-
10
ternal Revenue Code of 1986 is amended to read as
11
follows:
12
‘‘(1) IN GENERAL.—Amounts contributed by an
13
employee’s employer to any health freedom account
14
(as defined in section 223(d)) of such employee shall
15
be treated as employer-provided coverage for medical
16
expenses under an accident or health plan.’’.
17
(2) IN
GENERAL.—The amendment made by
18
this subsection shall apply with respect to taxable
19
years beginning after the date of the enactment of
20
this Act.
21
Æ
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