Freedom for Families Act

I 118TH CONGRESS 1ST SESSION H. R. 107 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 JANUARY 9, 2023 Mr. BIGGS 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 04:13 Jan 14, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H107.IH H107 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 107 IH SEC. 2. DISTRIBUTIONS FROM HEALTH SAVINGS ACCOUNTS 1 DURING PERIODS OF QUALIFIED 2 CAREGIVING. 3 (a) IN GENERAL.—Paragraphs (1) and (2) of section 4 223(f) of the Internal Revenue Code of 1986 are amended 5 to read as follows: 6 ‘‘(1) EXCLUSION OF AMOUNTS USED FOR 7 QUALIFIED MEDICAL EXPENSES OR DISTRIBUTED 8 DURING PERIODS OF QUALIFIED CAREGIVING.—Any 9 amount paid or distributed out of a health savings 10 account shall not be includible in gross income if it 11 is— 12 ‘‘(A) used exclusively to pay qualified med- 13 ical expenses of any account beneficiary, or 14 ‘‘(B) paid or distributed during a period of 15 qualified caregiving. 16 ‘‘(2) INCLUSION OF AMOUNTS NEITHER USED 17 FOR QUALIFIED MEDICAL EXPENSES NOR DISTRIB- 18 UTED DURING PERIODS OF QUALIFIED 19 CAREGIVING.—Any amount paid or distributed out 20 of a health savings account shall be included in the 21 gross income of the account beneficiary if it is not 22 described in paragraph (1).’’. 23 (b) DEFINITION OF PERIOD OF QUALIFIED 24 CAREGIVING.—Section 223(f) of the Internal Revenue 25 VerDate Sep 11 2014 04:13 Jan 14, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H107.IH H107 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 107 IH Code of 1986 is amended by adding at the end the fol- 1 lowing new paragraph: 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’’ after ‘‘paying the qualified medical expenses 13 of the account beneficiary’’. 14 (2) Section 223(f)(4) of such Code is amended 15 in the heading by striking ‘‘DISTRIBUTIONS NOT 16 USED FOR QUALIFIED MEDICAL EXPENSES’’ and in- 17 serting ‘‘CERTAIN DISTRIBUTIONS’’. 18 (d) EFFECTIVE DATE.—The amendments made by 19 this section shall apply with respect to taxable years begin- 20 ning after the date of the enactment of this Act. 21 VerDate Sep 11 2014 04:13 Jan 14, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H107.IH H107 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 107 IH SEC. 3. NO HIGH DEDUCTIBLE HEALTH PLAN REQUIRED 1 FOR HEALTH SAVINGS ACCOUNTS. 2 (a) IN GENERAL.—Section 223(a) of the Internal 3 Revenue Code of 1986 is amended by striking ‘‘who is an 4 eligible individual for any month during the taxable year’’. 5 (b) CONFORMING AMENDMENTS.— 6 (1) Section 223(b) of such Code is amended by 7 striking paragraphs (7) and (8). 8 (2) Section 223 of such Code is amended by 9 striking subsection (c). 10 (c) INCREASE IN CONTRIBUTION LIMIT FOR HEALTH 11 SAVINGS ACCOUNTS.— 12 (1) IN GENERAL.—Section 223(b)(1) of the In- 13 ternal Revenue Code of 1986 is amended by striking 14 ‘‘the sum of the monthly’’ and all that follows 15 through ‘‘eligible individual’’ and inserting ‘‘$9,000 16 (twice such amount in the case of a joint return)’’. 17 (2) CONFORMING AMENDMENTS.— 18 (A) Section 223(b) of such Code is amend- 19 ed by striking paragraphs (2), (3), and (5) and 20 by redesignating paragraphs (4) and (6) as 21 paragraphs (2) and (3), respectively. 22 (B) Section 223(b)(2) of such Code (as re- 23 designated by subparagraph (A)) is amended by 24 striking the last sentence. 25 VerDate Sep 11 2014 04:13 Jan 14, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H107.IH H107 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •HR 107 IH (C) Section 223(d)(1)(A)(ii) is amended by 1 striking ‘‘the sum of’’ and all that follows 2 through the period at the end and inserting 3 ‘‘the dollar amount in effect under subsection 4 (b)(1).’’. 5 (D) Section 223(g)(1) of such Code is 6 amended— 7 (i) by striking ‘‘Each dollar amount in 8 subsections (b)(2) and (c)(2)(A)’’ and in- 9 serting ‘‘The dollar amount in subsection 10 (b)(1)’’; 11 (ii) by striking ‘‘thereof’’ and all that 12 follows through ‘‘ ‘calendar year 2003’.’’ 13 and inserting ‘‘ ‘calendar year 1997’.’’; and 14 (iii) by striking ‘‘under subsections 15 (b)(2) and (c)(2)(A)’’ and inserting ‘‘under 16 subsection (b)(1)’’. 17 (d) EFFECTIVE DATE.—The amendments made by 18 this section shall apply with respect to months in taxable 19 years beginning after the date of the enactment of this 20 Act. 21 Æ VerDate Sep 11 2014 04:13 Jan 14, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\H107.IH H107 pbinns on DSKJLVW7X2PROD with $$_JOB