Federal

Homecare for Seniors Act

Source: Congress.gov · 623 words in original text

What This Bill Does

This bill allows people to use money from health savings accounts (accounts set aside for medical expenses) to pay for certain home care services without owing taxes on that money. The bill changes federal tax law to include qualified home care as a type of medical expense that can be paid for with health savings accounts.

Who It Affects

People who have health savings accounts and need home care services; service providers who are licensed by the state to provide home care; the Secretary of Health and Human Services; the Secretary of the Treasury.

Key Provisions

• Qualified home care now counts as a type of medical expense that can be paid for with pre-tax money from health savings accounts (Sec. 2(a)) • Qualified home care means a contract to provide 3 or more of these services in someone's home: help with eating, toileting, transferring, bathing, dressing, continence, or medication adherence (Sec. 2(a)) • Home care services must be provided by someone licensed by the state or provided in a way that meets state requirements (Sec. 2(a)) • Home care contracts between family members or related parties do not qualify for this tax benefit (Sec. 2(a)) • The Secretaries of Health and Human Services and Treasury must run a campaign to let the public know about this tax-free option (Sec. 2(c))

What Changes

Starting after this bill becomes law, people can withdraw money from health savings accounts to pay for qualified home care without paying taxes on that money, as long as the home care provider meets state licensing requirements and is not a family member.

Important Definitions

"Qualified home care" means a contract to provide at least 3 specific assistance services (eating, toileting, transferring, bathing, dressing, continence, or medication adherence) in someone's home, provided by a state-licensed service provider and not involving family members.

Effective Date

The changes apply to amounts paid for taxable years beginning after the date this bill becomes law (Sec. 2(b)).

I 118TH CONGRESS 1ST SESSION H. R. 1795 To amend the Internal Revenue Code of 1986 to allow qualified distributions from health savings accounts for certain home care expenses. IN THE HOUSE OF REPRESENTATIVES MARCH 24, 2023 Mr. SMITH of Nebraska (for himself, Ms. PORTER, Mr. BACON, Mr. TONKO, Mr. FLOOD, Ms. LOIS FRANKEL of Florida, Mr. FITZPATRICK, Mr. NEGUSE, Mr. BALDERSON, 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 allow quali- fied distributions from health savings accounts for cer- tain home care expenses. 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 ‘‘Homecare for Seniors 4 Act’’. 5 VerDate Sep 11 2014 18:04 Apr 08, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1795.IH H1795 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 1795 IH SEC. 2. CERTAIN HOME CARE EXPENSES TREATED AS 1 QUALIFIED DISTRIBUTIONS FROM HEALTH 2 SAVINGS ACCOUNTS. 3 (a) IN GENERAL.—Section 223(d)(2) of the Internal 4 Revenue Code of 1986 is amended— 5 (1) by striking ‘‘medical care (as defined in sec- 6 tion 213(d))’’ in subparagraph (A) and inserting 7 ‘‘specified medical care’’, and 8 (2) by adding at the end the following new sub- 9 paragraph: 10 ‘‘(E) SPECIFIED MEDICAL CARE.—For 11 purposes of this paragraph— 12 ‘‘(i) IN GENERAL.—The term ‘speci- 13 fied medical care’ means medical care (as 14 defined in section 213(d)) and qualified 15 home care. 16 ‘‘(ii) QUALIFIED HOME CARE.—The 17 term ‘qualified home care’ means a con- 18 tract to provide 3 or more of the following 19 services in the residence of the service re- 20 cipient: 21 ‘‘(I) Assistance with eating. 22 ‘‘(II) Assistance with toileting. 23 ‘‘(III) Assistance with transfer- 24 ring. 25 ‘‘(IV) Assistance with bathing. 26 VerDate Sep 11 2014 18:04 Apr 08, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1795.IH H1795 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 1795 IH ‘‘(V) Assistance with dressing. 1 ‘‘(VI) Assistance with continence. 2 ‘‘(VII) Medication adherence. 3 Such term shall not include any contract 4 unless the services provided pursuant to 5 such contract are provided by a service 6 provider which is licensed by the State to 7 provide such services or such services are 8 otherwise provided in a manner that is 9 consistent with State requirements. 10 ‘‘(iii) RELATED PARTIES.—The term 11 ‘qualified home care’ shall not include any 12 contract which is, directly or indirectly, be- 13 tween a service provider and a service re- 14 cipient who are related within the meaning 15 of section 267(b) or 707(b).’’. 16 (b) EFFECTIVE DATE.—The amendments made by 17 this section shall apply to amounts paid with respect to 18 taxable years beginning after the date of the enactment 19 of this Act. 20 (c) PROMOTION OF PUBLIC AWARENESS OF IN- 21 HOME SERVICE EXPENSES ELIGIBLE FOR TAX-FREE 22 DISTRIBUTION FROM HEALTH SAVINGS ACCOUNTS.—The 23 Secretary of Health and Human Services, in consultation 24 with the Secretary of the Treasury, shall carry out a cam- 25 VerDate Sep 11 2014 18:04 Apr 08, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1795.IH H1795 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 1795 IH paign to increase public awareness of the in-home service 1 expenses that are eligible for tax-free distribution from 2 health savings accounts. 3 Æ VerDate Sep 11 2014 18:04 Apr 08, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H1795.IH H1795 pbinns on DSKJLVW7X2PROD with $$_JOB

Important: This plain English summary was generated by AI and is provided for informational purposes only. It is not legal advice. Always consult the official bill text on Congress.gov or a qualified attorney for legal matters.