Health Savings Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 6286 To amend the Internal Revenue Code of 1986 to modify rules relating to health savings accounts. IN THE HOUSE OF REPRESENTATIVES MARCH 13, 2020 Mr. BURGESS introduced the following bill; which was referred to the Com- mittee on Ways and Means, and in addition to the Committees on the Judiciary, and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provi- sions as fall within the jurisdiction of the committee concerned A BILL To amend the Internal Revenue Code of 1986 to modify rules relating to health savings accounts. 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; TABLE OF CONTENTS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Health Savings Act of 2020’’. 5 (b) TABLE OF CONTENTS.—The table of contents for 6 this Act is as follows: 7 Sec. 1. Short title; table of contents. Sec. 2. Health savings accounts for children. Sec. 3. Allowing HSA rollover to child or parent of account holder. VerDate Sep 11 2014 01:20 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6211 E:\BILLS\H6286.IH H6286 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 6286 IH Sec. 4. Maximum contribution limit to HSA increased to amount of deductible and out-of-pocket limitation. Sec. 5. Equivalent bankruptcy protections for health savings accounts as retire- ment funds. Sec. 6. Allowance of silver and bronze plans in connection with health savings accounts. Sec. 7. Identification of HSA compatible plans. SEC. 2. HEALTH SAVINGS ACCOUNTS FOR CHILDREN. 1 (a) IN GENERAL.—Section 223 of the Internal Rev- 2 enue Code of 1986 is amended by redesignating subsection 3 (h) as subsection (i) and by inserting after subsection (g) 4 the following new subsection: 5 ‘‘(h) CHILD HEALTH SAVINGS ACCOUNTS.— 6 ‘‘(1) IN GENERAL.—In the case of an indi- 7 vidual, in addition to any deduction allowed under 8 subsection (a) for any taxable year, there shall be al- 9 lowed as a deduction under this section an amount 10 equal to the aggregate amount paid in cash by the 11 taxpayer during the taxable year to a child health 12 savings account of a child or grandchild of the tax- 13 payer. 14 ‘‘(2) LIMITATIONS.— 15 ‘‘(A) DEDUCTION LIMITATION.—The 16 amount taken into account under paragraph (1) 17 with respect to each child or grandchild of the 18 taxpayer, as the case may be, for the taxable 19 year shall not exceed the sum of the monthly 20 limitations with respect to such child for 21 VerDate Sep 11 2014 01:20 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6286.IH H6286 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 6286 IH months during the taxable year that the child 1 is an eligible individual. 2 ‘‘(B) LIMIT ON ACCOUNTS WITH RESPECT 3 TO INDIVIDUAL.—The aggregate amount of 4 contributions which may be made for any tax- 5 able year to all child health savings accounts es- 6 tablished and maintained on behalf of a child 7 shall not exceed the sum of the monthly limita- 8 tions for months during the taxable year that 9 the child is an eligible individual. 10 ‘‘(C) MONTHLY LIMITATION.—The month- 11 ly limitation for any month with respect to a 12 child is 1⁄12 of the amount in effect for the tax- 13 able year under subsection (c)(2)(A)(ii)(I). 14 ‘‘(3) TREATMENT OF ACCOUNT WHILE A DE- 15 PENDENT.—For purposes of this section, except as 16 otherwise provided in this subsection, a child health 17 savings account established for the benefit of the 18 child of a taxpayer shall be treated as a health sav- 19 ings account of the taxpayer until the first taxable 20 year (and each taxable year thereafter) for which no 21 deduction under section 151 is allowable to any tax- 22 payer with respect to such child, after which such 23 account shall be treated as a health savings account 24 of the child. The preceding sentence shall not apply 25 VerDate Sep 11 2014 01:20 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6286.IH H6286 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 6286 IH for purposes of applying the limitations in subsection 1 (b) to a health savings account of the taxpayer. 2 ‘‘(4) CHILD HEALTH SAVINGS ACCOUNT.—For 3 purposes of this subsection, the term ‘child health 4 savings account’ means a health savings account 5 designated as a child health savings account and es- 6 tablished for the benefit of a child of a taxpayer. 7 ‘‘(5) QUALIFIED MEDICAL EXPENSES.—For 8 purposes of this section, the term ‘qualified medical 9 expenses’ shall, with respect to any child health sav- 10 ings account, not include any amounts paid for med- 11 ical care (as defined in section 213(d)) for any indi- 12 vidual other than the child for whose benefit the ac- 13 count is maintained. 14 ‘‘(6) EXCEPTIONS FOR DISABILITY OR DEATH 15 OF CHILD.—If the child becomes disabled within the 16 meaning of section 72(m)(7) or dies— 17 ‘‘(A) subsection (f)(4)(A) shall not apply to 18 any subsequent payment or distribution, and 19 ‘‘(B) the taxpayer may rollover the amount 20 in such account to any health savings account 21 of the taxpayer or grandparent of the child or 22 to any child health savings account of any other 23 child of the taxpayer. 24 VerDate Sep 11 2014 01:20 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6286.IH H6286 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 6286 IH ‘‘(7) GUARDIANS.—Any legal guardian of a 1 child shall be treated as the parent of such child for 2 purposes of this section. 3 ‘‘(8) REGULATIONS.—The Secretary shall pre- 4 scribe such regulations as may be necessary to carry 5 out the purposes of this subsection, including rules 6 for determining application of this subsection in the 7 case of legal guardians and in the case of parents 8 of a child who file separately, are separated, or are 9 not married.’’. 10 (b) COORDINATION WITH MEANS-TESTED PRO- 11 GRAMS.—Amounts in a child health savings account shall 12 not be taken into account in determining resources for 13 purposes of title XIX of the Social Security Act. 14 (c) EFFECTIVE DATE.—The amendments made by 15 this section shall apply to taxable years beginning after 16 the date of the enactment of this Act. 17 SEC. 3. ALLOWING HSA ROLLOVER TO CHILD OR PARENT 18 OF ACCOUNT HOLDER. 19 (a) IN GENERAL.—Subparagraph (A) of section 20 223(f)(8) of the Internal Revenue Code of 1986 is amend- 21 ed— 22 (1) by inserting ‘‘child, parent, or grandparent’’ 23 after ‘‘surviving spouse’’, 24 VerDate Sep 11 2014 01:20 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6286.IH H6286 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 6286 IH (2) by inserting ‘‘child, parent, or grandparent, 1 as the case may be,’’ after ‘‘the spouse’’, 2 (3) by inserting ‘‘, CHILD, PARENT, OR GRAND- 3 PARENT’’ after ‘‘SPOUSE’’ in the heading thereof, 4 and 5 (4) by adding at the end the following: ‘‘In the 6 case of a child who acquires such beneficiary’s inter- 7 est and with respect to whom a deduction under sec- 8 tion 151 is allowable to another taxpayer for a tax- 9 able year beginning in the calendar year in which 10 such individual’s taxable year begins, such health 11 savings account shall be treated as a child health 12 savings account of the child.’’. 13 (b) EFFECTIVE DATE.—The amendments made by 14 this section shall apply to taxable years beginning after 15 the date of the enactment of this Act. 16 SEC. 4. MAXIMUM CONTRIBUTION LIMIT TO HSA IN- 17 CREASED TO AMOUNT OF DEDUCTIBLE AND 18 OUT-OF-POCKET LIMITATION. 19 (a) SELF-ONLY COVERAGE.—Subparagraph (A) of 20 section 223(b)(2) of the Internal Revenue Code of 1986 21 is amended by striking ‘‘$2,250’’ and inserting ‘‘the 22 amount in effect under subsection (c)(2)(A)(ii)(I)’’. 23 (b) FAMILY COVERAGE.—Subparagraph (B) of sec- 24 tion 223(b)(2) of such Code is amended by striking 25 VerDate Sep 11 2014 01:20 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H6286.IH H6286 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 6286 IH ‘‘$4,500’’ and inserting ‘‘the amount in effect under sub- 1 section (c)(2)(A)(ii)(II)’’. 2 (c) CONFORMING AMENDMENT.—Section 223(g)(1) 3 of such Code is amended by striking ‘‘subsections (b)(2) 4 and’’ and inserting ‘‘subsection’’. 5 (d) EFFECTIVE DATE.—The amendments made by 6 this section shall apply to taxable years beginning after 7 the date of the enactment of this Act. 8 SEC. 5. EQUIVALENT BANKRUPTCY PROTECTIONS FOR 9 HEALTH SAVINGS ACCOUNTS AS RETIRE- 10 MENT FUNDS. 11 (a) IN GENERAL.—Section 522 of title 11, United 12 States Code, is amended by adding at the end the fol- 13 lowing new subsection: 14 ‘‘(r) For purposes of this section, any health savings 15 account (as described in section 223 of the Internal Rev- 16 enue Code of 1986) shall be treated in the same manner 17 as an individual retirement account described in section 18 408 of such Code.’’. 19 (b) EFFECTIVE DATE.—The amendment made by 20 this section shall apply to cases commencing under title 21 11, United States Code, after the date of the enactment 22 of this Act. 23 VerDate Sep 11 2014 01:20 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H6286.IH H6286 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 6286 IH SEC. 6. ALLOWANCE OF SILVER AND BRONZE PLANS IN 1 CONNECTION WITH HEALTH SAVINGS AC- 2 COUNTS. 3 (a) IN GENERAL.—Section 223 of the Internal Rev- 4 enue Code of 1986 is amended— 5 (1) by striking ‘‘a high deductible health plan’’ 6 each place it appears and inserting ‘‘an HSA com- 7 patible health plan’’, 8 (2) by striking ‘‘high deductible health plan’’ in 9 subsection (b)(8)(A)(ii) and inserting ‘‘HSA compat- 10 ible health plan’’, and 11 (3) by striking ‘‘the high deductible health 12 plan’’ in subsection (c)(1)(A)(ii)(II) and inserting 13 ‘‘the HSA compatible health plan’’. 14 (b) HSA COMPATIBLE HEALTH PLAN DEFINED.— 15 Paragraph (2) of section 223(c) of such Code is amended 16 by redesignating subparagraphs (A), (B), (C), and (D) as 17 subparagraphs (B), (C), (D), and (E) and by inserting 18 before subparagraph (B), as so redesignated, the following 19 new subparagraph: 20 ‘‘(A) IN GENERAL.—The term ‘HSA com- 21 patible health plan’ means— 22 ‘‘(i) any high deductible health plan, 23 ‘‘(ii) any plan described in section 24 1302(e) of the Patient Protection and Af- 25 VerDate Sep 11 2014 01:20 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H6286.IH H6286 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 6286 IH fordable Care Act (42 U.S.C. 18022(e)) 1 (relating to catastrophic plan), or 2 ‘‘(iii) any silver or bronze plan which 3 was enrolled in through an Exchange es- 4 tablished under section 1311 or section 5 1321 of the Patient Protection and Afford- 6 able Care Act (42 U.S.C. 1311, 18041).’’. 7 (c) CLERICAL AMENDMENTS.—Section 223 of such 8 Code is amended— 9 (1) by striking ‘‘IN GENERAL’’ in the heading 10 for subsection (c)(2)(B), as redesignated by sub- 11 section (b) of this Act, and inserting ‘‘HIGH DE- 12 DUCTIBLE HEALTH PLAN’’, 13 (2) by striking ‘‘HIGH DEDUCTIBLE HEALTH 14 PLAN’’ in the heading for subsection (b)(8)(B) and 15 inserting ‘‘HSA COMPATIBLE HEALTH PLAN’’, and 16 (3) by striking ‘‘HIGH DEDUCTIBLE HEALTH 17 PLAN’’ in the heading for subsection (c)(2) and in- 18 serting ‘‘HSA COMPATIBLE HEALTH PLAN’’. 19 (d) EFFECTIVE DATE.—The amendments made by 20 this section shall apply to taxable years beginning after 21 December 31, 2020. 22 VerDate Sep 11 2014 01:20 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H6286.IH H6286 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 6286 IH SEC. 7. IDENTIFICATION OF HSA COMPATIBLE PLANS. 1 Section 1103(b) of the Patient Protection and Af- 2 fordable Care Act (42 U.S.C. 18003(b)) is amended by 3 adding at the end the following new paragraph: 4 ‘‘(3) IDENTIFICATION OF HSA COMPATIBLE 5 PLANS.—Beginning for plan year 2018, the format 6 described in paragraph (1) shall require that infor- 7 mation on a coverage option described in subsection 8 (a)(2) that is an HSA compatible health plan (as de- 9 fined in section 223(c)(2) of the Internal Revenue 10 Code of 1986) identifies such plan as a plan that 11 satisfies the requirement of section 223(c)(1)(A)(i) 12 of such Code.’’. 13 Æ VerDate Sep 11 2014 01:20 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\H6286.IH H6286 pamtmann on DSKBC07HB2PROD with BILLS