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I
116TH CONGRESS
2D SESSION
H. R. 7997
To allow individuals to mitigate the financial impact of COVID–19 by taking
a one-time distribution of flexible spending arrangement funds in certain
plan years, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 11, 2020
Mrs. AXNE (for herself and Mr. BALDERSON) introduced the following bill;
which was referred to the Committee on Ways and Means
A BILL
To allow individuals to mitigate the financial impact of
COVID–19 by taking a one-time distribution of flexible
spending arrangement funds in certain plan years, and
for other purposes.
Be it enacted by the Senate and House of Representa-
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tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE.
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This Act may be cited as the ‘‘COVID–19 Health and
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Dependent Care Flexible Spending Account Distribution
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Act’’.
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•HR 7997 IH
SEC. 2. SPECIAL DISPOSITION RULES FOR UNUSED BENE-
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FITS
IN
FLEXIBLE
SPENDING
ARRANGE-
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MENTS OF INDIVIDUALS IN DURING CERTAIN
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PLAN YEARS.
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(a) FSAS MAY ALLOW QUALIFIED DISTRIBUTION.—
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For purposes of sections 106, 125, and 129 of the Internal
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Revenue Code of 1986, a flexible spending arrangement
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may allow a qualified distribution.
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(b) TAXES APPLIED TO CERTAIN DISTRIBUTIONS.—
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For purposes of sections 125(a) and 129(a) of such Code,
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such sections shall not apply to any benefit distributed
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under subsection (a) from a flexible spending arrangement
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for a use other than the qualifying benefit for which such
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arrangement was established.
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(c) SPECIAL RULE FOR DISPOSITION OF UNUSED
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BENEFITS.—For purposes of such Code, a plan shall not
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fail to be treated as a cafeteria plan, health flexible spend-
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ing arrangement, or dependent care flexible spending ar-
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rangement merely because such arrangement provides for
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a qualified distribution.
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(d) QUALIFIED DISTRIBUTION.—For purposes of this
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section, the term ‘‘qualified distribution’’ means a one-
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time distribution in a qualifying plan year to an individual
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of all or a portion of the balance in the employee’s account
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under a cafeteria plan, health flexible spending arrange-
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ment, or dependent care flexible spending arrangement.
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(e) QUALIFYING PLAN YEAR.—The term ‘‘qualifying
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plan year’’ means plan year 2020, plan year 2021, and
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any plan year that falls during a calendar year in which
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a national emergency is declared by the President under
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the National Emergencies Act (50 U.S.C. 1601 et seq.)
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with respect to the Coronavirus Disease 2019 (COVID–
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19).
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(f) GUIDANCE.—The Secretary of the Treasury (or
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the Secretary’s delegate) shall issue guidance with respect
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to the interaction between a qualified distribution under
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subsection (a) and the nondiscrimination testing provi-
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sions of section 125 of such Code.
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