American Future Healthcare Act of 2016

Summary: American Future Healthcare Act of 2016  This bill amends the Internal Revenue Code, with respect to health savings accounts (HSAs), to:    repeal the requirement that an individual making a tax deductible contribution to an HSA be covered by a high deductible health care plan;   increase the maximum HSA contribution level;   allow Medicare eligible individuals to contribute to an HSA;   allow HSAs to be used to purchase health insurance;   provide a cost-of-living adjustment for the limits on additional contributions for individuals 55 or older (catch-up contributions);   require the cost-of-living adjustments to be indexed to the CPI medical care component (the medical care component for the Consumer Price Index for All Urban Consumers published by the Department of Labor); and   allow a rollover of HSA amounts to a Medicare Advantage Medical Savings Account (MSA).  

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``American Future Healthcare Act of 
2016''.

SEC. 2. REFORM OF HEALTH SAVINGS ACCOUNTS.

    (a) Repeal of High Deductible Health Plan Requirement.--Section 
223(a) of the Internal Revenue Code of 1986 is amended to read as 
follows:
    ``(a) Deduction Allowed.--In the case of an individual, there shall 
be allowed as a deduction for a taxable year an amount equal to the 
aggregate amount paid in cash during such taxable year by or on behalf 
of such individual to a health savings account of such individual.''.
    (b) Increase in Deductible HSA Contribution Limitations.--Section 
223(b)(1) of such Code is amended by striking ``the sum of the 
monthly'' and all that follows through ``eligible individual'' and 
inserting ``$10,000 ($20,000 in the case of a joint return)''.
    (c) Medicare Eligible Individuals Eligible To Contribute to HSA.--
Section 223(b) of such Code is amended by striking paragraph (7).
    (d) Purchase of Health Insurance.--Section 223(d)(2) of such Code 
is amended--
            (1) by striking subparagraphs (B) and (C), and
            (2) in subparagraph (A) by striking ``(A) In general'' and 
        all that follows through ``The term'' and inserting ``The 
        term''.
    (e) Cost-of-Living Adjustment for Catchup Contributions.--Section 
223(f)(1) of such Code (as redesignated by subsection (g)(3)) is 
amended by striking ``Each dollar amount in subsections (b)(2) and 
(c)(2)(A)'' and inserting ``In the case of a taxable year beginning 
after December 31, 2015, each dollar amount in paragraphs (1) and (2) 
of subsection (b)''.
    (f) Cost-of-Living Adjustment Indexed to CPI Medical Care 
Component.--Section 223(f) (as so redesignated) is amended by adding at 
the end the following new paragraph:
            ``(3) CPI medical care component.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the cost-of-living adjsutment determined under section 
                1(f)(3) for the calendar year shall be determined by 
                substituting `CPI medical care component' for `CPI'.
                    ``(B) CPI medical care component.--For purposes of 
                subparagraph (A), the term `CPI medical care component' 
                means the medical care component for the Consumer Price 
                Index for All Urban Consumers published by the 
                Department of Labor.''.
    (g) Conforming Amendments.--
            (1) Section 223(b) of such Code is amended by striking 
        paragraphs (2), (5), and (8) and by redesignating paragraphs 
        (3), (4), and (6) as paragraphs (2), (3), and (4), 
        respectively.
            (2) Section 223(b)(3) of such Code (as redesignated by 
        paragraph (1)) is amended by striking the last sentence.
            (3) Section 223 of such Code is amended by striking 
        subsection (c) and redesignating subsections (d) through (h) as 
        subsections (c) through (g), respectively.
            (4) Section 223(c)(1)(A) of such Code (as redesignated by 
        paragraph (3)) is amended--
                    (A) by striking ``subsection (f)(5)'' and inserting 
                ``subsection (e)(5)'', and
                    (B) in clause (ii) by striking ``the sum 
                of--'' and all that follows and inserting ``the dollar 
                amount in effect under subsection (b)(1).''.
            (5) Section 223(f)(1) (as redesignated by paragraph (3)) is 
        amended by striking ``calendar year 2003'' and inserting 
        ``calendar year 2014''.
            (6) Section 26(b)(U) of such Code is amended by striking 
        ``section 223(f)(4)'' and inserting ``section 223(e)(4)''.
            (7) Sections 35(g)(3), 220(f)(5)(A), 848(e)(1)(v), 
        4973(a)(5), and 6051(a)(12) of such Code are each amended by 
        striking ``section 223(d)'' each place it appears and inserting 
        ``section 223(c)''.
            (8) Section 106(d)(1) of such Code is amended--
                    (A) by striking ``who is an eligible individual (as 
                defined in section 223(c)(1))'', and
                    (B) by striking ``section 223(d)'' and inserting 
                ``section 223(c)''.
            (9) Section 408(d)(9) of such Code is amended--
                    (A) in subparagraph (A) by striking ``who is an 
                eligible individual (as defined in section 223(c)) 
                and'', and
                    (B) in subparagraph (C) by striking ``computed on 
                the basis of the type of coverage under the high 
                deductible health plan covering the individual at the 
                time of the qualified HSA funding distribution''.
            (10) Section 877A(g)(6) of such Code is amended by striking 
        ``223(f)(4)'' and inserting ``223(e)(4)''.
            (11) Section 4973(g) of such Code is amended--
                    (A) by striking ``section 223(d)'' and inserting 
                ``section 223(c)'',
                    (B) in paragraph (2), by striking ``section 
                223(f)(2)'' and inserting ``section 223(e)(2)'', and
                    (C) by striking ``section 223(f)(3)'' and inserting 
                ``section 223(e)(3)''.
            (12) Section 4975 of such Code is amended--
                    (A) in subsection (c)(6)--
                            (i) by striking ``section 223(d)'' and 
                        inserting ``section 223(c)'', and
                            (ii) by striking ``section 223(e)(2)'' and 
                        inserting ``section 223(d)(2)'', and
                    (B) in subsection (e)(1)(E), by striking ``section 
                223(d)'' and inserting ``section 223(c)''.
            (13) Section 6693(a)(2)(C) of such Code is amended by 
        striking ``section 223(h)'' and inserting ``section 223(g)''.
    (h) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2015.

SEC. 3. HSA ROLLOVER TO MEDICARE ADVANTAGE MSA.

    (a) In General.--Section 138(b)(2) of the Internal Revenue Code of 
1986 is amended by striking ``or'' at the end of subparagraph (A), by 
adding ``or'' at the end of subparagraph (C), and by adding at the end 
the following new subparagraph:
                    ``(C) a HSA rollover contribution described in 
                subsection (d)(5),''.
    (b) HSA Rollover Contribution.--Section 138(c) of such Code is 
amended by adding at the end the following new paragraph:
            ``(5) Rollover contribution.--An amount is described in 
        this paragraph as a rollover contribution if it meets the 
        requirement of subparagraphs (A) and (B).
                    ``(A) In general.--The requirements of this 
                subparagraph are met in the case of an amount paid or 
                distributed from a health savings to the account 
                beneficiary to the extent the amount is received is 
                paid into a Medicare Advantage MSA of such beneficiary 
                not later than the 60th day after the day on which the 
                beneficiary receives the payment or distribution.
                    ``(B) Limitation.--This paragraph shall not apply 
                to any amount described in subparagraph (A) received by 
                an individual from a health savings account if, at any 
                time during the 1-year period ending on the day of such 
                receipt, such individual received any other amount 
                described in subparagraph (A) from a health savings 
                account which was not includible in the individual's 
                gross income because of the application of section 
                223(e)(5)(A).''.
    (c) Conforming Amendment.--Section 223(e)(5)(A) of such Code, as 
amended by section 2, is amended by inserting ``or Medicare Advantage 
MSA'' after ``into a health savings account''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2015.