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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 5297 Introduced in Senate (IS)]

<DOC>

118th CONGRESS
  2d Session
                                S. 5297

To amend the Internal Revenue Code of 1986 to increase the limitations 
  on contributions to health savings accounts, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           November 12, 2024

   Mr. Paul introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
To amend the Internal Revenue Code of 1986 to increase the limitations 
  on contributions to health savings accounts, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Health Savings Accounts For All Act 
of 2024''.

SEC. 2. INCREASE IN CONTRIBUTION LIMITATIONS.

    (a) In General.--Subsection (b) of section 223 of the Internal 
Revenue Code of 1986 is amended--
            (1) in paragraph (1), by striking ``the sum of'' and all 
        that follows through the period and inserting ``an amount equal 
        to the applicable dollar amount under paragraph (1)(B) of 
        section 402(g) (as adjusted pursuant to paragraph (4) of such 
        section) with respect to such taxable year.'',
            (2) by striking paragraphs (2), (3), (5), (7), and (8),
            (3) by inserting after paragraph (1) the following:
            ``(2) Additional contributions for individuals 50 or 
        older.--In the case of an individual who has attained age 50 
        before the close of the taxable year, the amount of the 
        limitation under paragraph (1) shall be increased by an amount 
        equal to the applicable dollar amount under subparagraph (B)(i) 
        of section 414(v)(2) (as adjusted pursuant to subparagraph (C) 
        of such section).'',
            (4) in paragraph (4), by striking the flush matter 
        following subparagraph (C), and
            (5) by redesignating paragraphs (4) and (6) as paragraphs 
        (3) and (4), respectively.
    (b) Conforming Amendments.--
            (1) Subparagraph (A) of section 223(d)(1) of the Internal 
        Revenue Code of 1986 is amended by striking ``the sum of--'' 
        and all that follows through the period and inserting ``the 
        amount determined under subsection (b)(1).''.
            (2) Subsection (g) of section 223 of such Code is amended--
                    (A) by striking ``subsections (b)(2) and 
                (c)(2)(A)'' both places it appears and inserting 
                ``subsection (c)(2)(A)'', and
                    (B) by amending subparagraph (B) to read as 
                follows:
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                such taxable year begins determined by substituting 
                `calendar year 2003' for `calendar year 2016' in 
                subparagraph (A)(ii) thereof.''.
            (3) Section 26(b)(2)(S) of such Code is amended by striking 
        ``, 223(b)(8)(B)(i)(II),''.
            (4) Section 408(d)(9)(C)(i)(I) of such Code is amended by 
        striking ``computed on the basis of the type of coverage under 
        the high deductible health plan covering the individual''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 3. FREEDOM FROM MANDATE.

    (a) In General.--Section 223 of the Internal Revenue Code of 1986, 
as amended by section 2, is further amended by striking subsections (c) 
and (g) and by redesignating subsections (d), (e), (f), and (h) as 
subsections (c), (d), (e), and (f), respectively.
    (b) Conforming Amendments.--
            (1) Subsection (a) of section 223 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 the 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.''.
            (2) Subsection (c)(1)(A) of section 223 of such Code, as 
        amended by section 2 and redesignated by subsection (a), is 
        further amended by striking ``subsection (f)(4)'' and inserting 
        ``subsection (e)(4)''.
            (3) Subparagraph (U) of section 26(b)(2) of such Code, as 
        amended by section 2, is further amended by striking ``section 
        223(f)(3)'' and inserting ``section 223(e)(3)''.
            (4) Sections 35(g)(3), 220(f)(5)(A), 848(e)(1)(B)(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)''.
            (5) 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)''.
            (6) Section 106(e) of such Code is amended--
                    (A) by striking paragraphs (3) and (4) and by 
                redesignating paragraph (5) as paragraph (4),
                    (B) by inserting after paragraph (2) the following 
                new paragraph:
            ``(3) Treatment as rollover contribution.--A qualified HSA 
        distribution shall be treated as a rollover contribution 
        described in section 223(e)(4).'', and
                    (C) by striking ``to any eligible individual 
                covered under a high deductible health plan of the 
                employer'' in paragraph (4)(B)(ii) (as so redesignated) 
                and inserting ``to any employee with respect to whom a 
                health savings account has been established''.
            (7) Section 408(d)(9)(A) of such Code is amended by 
        striking ``who is an eligible individual (as defined in section 
        223(c)) and''.
            (8) Section 877A(g)(6) of such Code is amended by striking 
        ``223(f)(4)'' and inserting ``223(e)(4)''.
            (9) Section 4973(g) of such Code is amended--
                    (A) by striking ``section 223(d)'' and inserting 
                ``section 223(c)'',
                    (B) in paragraph (1), by striking ``or 223(f)(5)'' 
                and inserting ``or 223(e)(5)'',
                    (C) in paragraph (2)(A), by striking ``section 
                223(f)(2)'' and inserting ``section 223(e)(2)'', and
                    (D) in the flush matter at the end, by striking 
                ``section 223(f)(3)'' and inserting ``section 
                223(e)(3)''.
            (10) 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)''.
            (11) Subsection (b) of section 4980G of such Code is 
        amended to read as follows:
    ``(b) Rules and Requirements.--
            ``(1) In general.--An employer meets the requirements of 
        this subsection for any calendar year if the employer makes 
        available comparable contributions to the health savings 
        accounts of all comparable participating employees for each 
        coverage period during such calendar year.
            ``(2) Comparable contributions.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the term `comparable contributions' means 
                contributions--
                            ``(i) which are the same amount, or
                            ``(ii) if the employees are covered by a 
                        health plan, which are the same percentage of 
                        the annual deductible limit under the plan 
                        covering the employees.
                    ``(B) Part-year employees.--In the case of an 
                employee who is employed by the employer for only a 
                portion of the calendar year, a contribution to the 
                health savings account of such employee shall be 
                treated as comparable if it is an amount which bears 
                the same ratio to the comparable amount (determined 
                without regard to this subparagraph) as such portion 
                bears to the entire calendar year.
            ``(3) Comparable participating employees.--For purposes of 
        paragraph (1), the term `comparable participating employees' 
        means all employees who are covered (if at all) under the same 
        health plan of the employer and have the same category of 
        coverage. For purposes of the preceding sentence, the 
        categories of coverage are self-only and family coverage.
            ``(4) Part-time employees.--
                    ``(A) In general.--Paragraph (3) shall be applied 
                separately with respect to part-time employees and 
                other employees.
                    ``(B) Part-time employee.--For purposes of 
                subparagraph (A), the term `part-time employee' means 
                any employee who is customarily employed for fewer than 
                30 hours per week.''.
            (12) Section 4980G(d) of such Code is amended by striking 
        ``section 4980E'' and inserting ``this section''.
            (13) Section 6693(a)(2)(C) of such Code is amended by 
        striking ``section 223(h)'' and inserting ``section 223(f)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 4. AMOUNTS PAID FOR HEALTH INSURANCE OR DIRECT PRIMARY CARE 
              SERVICE ARRANGEMENT.

    (a) In General.--Paragraph (2) of section 223(c) of the Internal 
Revenue Code of 1986, as redesignated by section 3, is amended--
            (1) in subparagraph (A), by inserting ``or pursuant to an 
        arrangement under which an individual is provided coverage 
        restricted to primary care services in exchange for a fixed 
        periodic fee or payment for primary care services'' after 
        ``menstrual care products'',
            (2) by striking subparagraphs (B) and (C), and
            (3) by redesignating subparagraph (D) as subparagraph (B).
    (b) Conforming Amendment.--Paragraph (2) of section 223(c) of the 
Internal Revenue Code of 1986, as amended by the preceding sections of 
this Act, is further amended by striking ``and any dependent (as 
defined in section 152, determined without regard to subsections 
(b)(1), (b)(2), and (d)(1)(B) thereof) of such individual'' and 
inserting ``any dependent (as defined in section 152, determined 
without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of 
such individual, and any child (as defined in section 152(f)(1)) of 
such individual who has not attained the age of 27 before the end of 
such individual's taxable year''.
    (c) Technical Amendments.--
            (1) Section 220(d)(2)(A) of the Internal Revenue Code of 
        1986 is amended by striking ``section 223(d)(2)(D)'' and 
        inserting ``section 223(c)(2)(B)''.
            (2) Subsection (f) of section 106 of the Internal Revenue 
        Code of 1986 is amended by striking ``section 223(d)(2)(D)'' 
        and inserting ``section 223(c)(2)(B)''.
    (d) Effective Dates.--
            (1) In general.--The amendments made by subsections (a) and 
        (b) shall apply with respect to amounts paid after the date of 
        the enactment of this Act in taxable years beginning after such 
        date.
            (2) Technical amendments.--The amendments made by 
        subsection (c) shall apply with respect to taxable years 
        beginning after the date of enactment of this Act.

SEC. 5. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES INCURRED BEFORE 
              ESTABLISHMENT OF ACCOUNT.

    (a) In General.--Paragraph (2) of section 223(c) of the Internal 
Revenue Code of 1986, as amended and redesignated by the preceding 
sections of this Act, is further amended by adding at the end the 
following new subparagraph:
                    ``(C) Certain medical expenses incurred before 
                establishment of account treated as qualified.--An 
                expense shall not fail to be treated as a qualified 
                medical expense solely because such expense was 
                incurred before the establishment of the health savings 
                account if such expense was incurred--
                            ``(i) during either--
                                    ``(I) the taxable year in which the 
                                health savings account was established, 
                                or
                                    ``(II) the preceding taxable year, 
                                in the case of a health savings account 
                                established after the taxable year in 
                                which such expense was incurred but 
                                before the time prescribed by law for 
                                filing the return for such taxable year 
                                (not including extensions thereof), and
                            ``(ii) for medical care which (but for the 
                        fact that it was incurred before the 
                        establishment of the account) otherwise meets 
                        the requirements of the preceding 
                        subparagraphs.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

SEC. 6. ADMINISTRATIVE ERROR CORRECTION BEFORE DUE DATE OF RETURN.

    (a) In General.--Paragraph (4) of section 223(e) of the Internal 
Revenue Code of 1986, as amended and redesignated by the preceding 
sections of this Act, is amended by adding at the end the following new 
subparagraph:
                    ``(D) Exception for administrative errors corrected 
                before due date of return.--Subparagraph (A) shall not 
                apply if any payment or distribution is made to correct 
                an administrative, clerical, or payroll contribution 
                error and if--
                            ``(i) such distribution is received by the 
                        individual on or before the last day prescribed 
                        by law (including extensions of time) for 
                        filing such individual's return for such 
                        taxable year, and
                            ``(ii) such distribution is accompanied by 
                        the amount of net income attributable to such 
                        contribution.
                Any net income described in clause (ii) shall be 
                included in the gross income of the individual for the 
                taxable year in which it is received.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 7. ALLOWING HSA ROLLOVER TO CHILD OR PARENT OF ACCOUNT HOLDER.

    (a) In General.--Paragraph (8)(A) of section 223(e) of the Internal 
Revenue Code of 1986, as redesignated by the preceding sections of this 
Act, is amended--
            (1) by inserting ``, child, parent, or grandparent'' after 
        ``surviving spouse'',
            (2) by inserting ``, child, parent, or grandparent, as the 
        case may be,'' after ``the spouse'',
            (3) by inserting ``, child, parent, or grandparent'' after 
        ``spouse'' in the heading thereof, and
            (4) by adding at the end the following: ``In the case of a 
        child who acquires such beneficiary's interest and with respect 
        to whom a deduction under section 151 is allowable to another 
        taxpayer for a taxable year beginning in the calendar year in 
        which such individual's taxable year begins, such health 
        savings account shall be treated as a health savings account of 
        such child.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 8. COVERAGE FOR AMOUNTS PAID FOR VITAMINS, DIETARY SUPPLEMENTS, 
              GYM MEMBERSHIPS, AND WEARABLE FITNESS TRACKERS.

    (a) In General.--Paragraph (2) of section 223(c) of the Internal 
Revenue Code of 1986, as amended by the preceding provisions of this 
Act, is amended--
            (1) in subparagraph (A), by inserting ``, qualified 
        wellness expenses,'' after ``menstrual care products'', and
            (2) by adding at the end the following:
                    ``(C) Qualified wellness expenses.--For purposes of 
                this paragraph, the term `qualified wellness expenses' 
                means amounts paid for--
                            ``(i) vitamins,
                            ``(ii) dietary supplements (as defined in 
                        section 201(ff) of the Federal Food, Drug, and 
                        Cosmetic Act (21 U.S.C. 321(ff))),
                            ``(iii) membership at a gym or fitness 
                        facility, or
                            ``(iv) wearable fitness trackers.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 9. EQUIVALENT BANKRUPTCY PROTECTIONS FOR HEALTH SAVINGS ACCOUNTS 
              AS RETIREMENT FUNDS.

    (a) In General.--Section 522 of title 11, United States Code, is 
amended by adding at the end the following new subsection:
    ``(r) Treatment of Health Savings Accounts.--For purposes of this 
section, any health savings account (as described in section 223 of the 
Internal Revenue Code of 1986) shall be treated in the same manner as 
an individual retirement account described in section 408 of such 
Code.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to cases commencing under title 11, United States Code, after the date 
of the enactment of this Act.
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