I

106TH CONGRESS

1ST SESSION H. R. 614

To amend the Internal Revenue Code of 1986 to expand the availability

of medical savings accounts.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 8, 1999

Mr. ARCHER (for himself, Mr. LIPINSKI, Mr. THOMAS, Mr. CRANE, Mr. HALL

of Texas, Mr. COOKSEY, Mr. GOSS, Mr. ARMEY, Mr. ROYCE, Mr. PETERSON of Pennsylvania, Mr. BRADY of Texas, Mr. MCCOLLUM, Mr.

PORTMAN, Mr. HILLEARY, Mr. HOSTETTLER, Mr. BONILLA, Mr.

TANCREDO, Mr. STUMP, Mr. LARGENT, Mr. CUNNINGHAM, Mr. YOUNG

of Alaska, Mr. KOLBE, Mrs. MYRICK, Mr. RAMSTAD, Mr. COBURN, Mr.

BURTON of Indiana, Mr. ENGLISH, Mr. MCCRERY, Mr. HAYWORTH, and

Mr. SHADEGG) 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 expand

the availability of medical savings accounts.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Medical Savings Ac5 count Effectiveness Act of 1999’’.
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1 SEC. 2. EXPANSION OF AVAILABILITY OF MEDICAL SAV2 INGS ACCOUNTS.

3 (a) REPEAL OF LIMITATIONS ON NUMBER OF MEDI4 CAL SAVINGS ACCOUNTS.—

5 (1) IN GENERAL.—Subsections (i) and (j) of

6 section 220 of the Internal Revenue Code of 1986

7 are hereby repealed.

8 (2) CONFORMING AMENDMENT.—Paragraph (1)

9 of section 220(c) of such Code is amended by strik10 ing subparagraph (D).

11 (b) ALL EMPLOYERS MAY OFFER MEDICAL SAVINGS

12 ACCOUNTS.—

13 (1) IN GENERAL.—Subclause (I) of section

14 220(c)(1)(A)(iii) of such Code (defining eligible indi15 vidual) is amended by striking ‘‘and such employer

16 is a small employer’’.

17 (2) CONFORMING AMENDMENTS.—

18 (A) Paragraph (1) of section 220(c) of

19 such Code is amended by striking subparagraph

20 (C).

21 (B) Subsection (c) of section 220 of such

22 Code is amended by striking paragraph (4) and

23 by redesignating paragraph (5) as paragraph

24 (4).

25 (c) INCREASE IN AMOUNT OF DEDUCTION ALLOWED

26 FOR CONTRIBUTIONS TO MEDICAL SAVINGS ACCOUNTS.—
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1 (1) IN GENERAL.—Paragraph (2) of section

2 220(b) of such Code is amended to read as follows:

3 ‘‘(2) MONTHLY LIMITATION.—The monthly limitation for any month is the amount equal to 1 4 ⁄12 of

5 the annual deductible (as of the first day of such

6 month) of the individual’s coverage under the high

7 deductible health plan.’’.

8 (2) CONFORMING AMENDMENT.—Clause (ii) of

9 section 220(d)(1)(A) of such Code is amended by

10 striking ‘‘75 percent of’’.

11 (d) BOTH EMPLOYERS AND EMPLOYEES MAY CON12 TRIBUTE TO MEDICAL SAVINGS ACCOUNTS.—Paragraph

13 (5) of section 220(b) of such Code is amended to read

14 as follows:

15 ‘‘(5) COORDINATION WITH EXCLUSION FOR EM16 PLOYER CONTRIBUTIONS.—The limitation which

17 would (but for this paragraph) apply under this sub18 section to the taxpayer for any taxable year shall be

19 reduced (but not below zero) by the amount which

20 would (but for section 106(b)) be includible in the

21 taxpayer’s gross income for such taxable year.’’.

22 (e) REDUCTION OF PERMITTED DEDUCTIBLES

23 UNDER HIGH DEDUCTIBLE HEALTH PLANS.—
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1 (1) IN GENERAL.—Subparagraph (A) of section

2 220(c)(2) of such Code (defining high deductible

3 health plan) is amended—

4 (A) by striking ‘‘$1,500’’ and inserting

5 ‘‘$1,000’’, and

6 (B) by striking ‘‘$3,000’’ in clause (ii) and

7 inserting ‘‘$2,000’’.

8 (2) CONFORMING AMENDMENT.—Subsection (g)

9 of section 220 of such Code is amended—

10 (A) by striking ‘‘1998’’ and inserting

11 ‘‘1999’’; and

12 (B) by striking ‘‘1997’’ and inserting

13 ‘‘1998’’.

14 (f) MEDICAL SAVINGS ACCOUNTS MAY BE OFFERED

15 UNDER CAFETERIA PLANS.—Subsection (f) of section

16 125 of such Code is amended by striking ‘‘106(b),’’.

17 (g) EFFECTIVE DATE.—The amendments made by

18 this section shall apply to taxable years ending after the

19 date of the enactment of this Act.

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