II

106TH CONGRESS

1ST SESSION S. 657

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

of medical savings accounts, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 18, 1999

Mr. INHOFE 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 expand

the availability of medical savings accounts, and for other

purposes.

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 Expansion Act of 1999’’.

6 SEC. 2. REPEAL OF RESTRICTIONS ON TAXPAYERS HAVING

7 MEDICAL SAVINGS ACCOUNTS.

8 (a) REPEAL OF NUMERICAL LIMITATIONS AND TER9 MINATION.—
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•S 657 IS

1 (1) IN GENERAL.—Section 220 of the Internal

2 Revenue Code of 1986 (relating to medical savings

3 accounts) is amended by striking subsections (i) and

4 (j).

5 (2) MEDICARE+CHOICE.—Section 138 of such

6 Code (relating to Medicare+Choice MSA) is amend7 ed by striking subsection (f).

8 (3) CONFORMING AMENDMENT.—Section

9 220(c)(1) of such Code is amended by striking sub10 paragraph (D).

11 (b) REPEAL OF RESTRICTIONS ON INDIVIDUALS

12 WHO HAVE MEDICAL SAVINGS ACCOUNTS.—

13 (1) IN GENERAL.—Section 220(c)(1)(A) of the

14 Internal Revenue Code of 1986 (relating to eligible

15 individual) is amended by inserting ‘‘and’’ at the end

16 of clause (i), by striking ‘‘, and’’ at the end of clause

17 (ii)(II) and inserting a period, and by striking clause

18 (iii).

19 (2) CONFORMING AMENDMENTS.—

20 (A) Section 220(b) of such Code is amend21 ed by striking paragraph (4) and by redesig22 nating paragraphs (5), (6), and (7) as para23 graphs (4), (5), and (6), respectively.
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•S 657 IS

1 (B) Section 220(c)(1) of such Code, as

2 amended by subsection (a)(3), is amended by

3 striking subparagraph (C).

4 (C) Section 220(c) of such Code is amend5 ed by striking paragraph (4) and by redesig6 nating paragraph (5) as paragraph (4).

7 (c) REPEAL OF RESTRICTION ON JOINT EMPLOYER8 EMPLOYEE CONTRIBUTIONS.—Section 220(b) of the In9 ternal Revenue Code of 1986 (relating to limitations) is

10 amended by striking paragraph (4), as redesignated by

11 subsection (b)(2)(A), and by redesignating paragraphs (5)

12 and (6) (as so redesignated) as paragraphs (4) and (5),

13 respectively.

14 (d) 100 PERCENT FUNDING OF ACCOUNT AL15 LOWED.—

16 (1) IN GENERAL.—Section 220(b)(2) of the In17 ternal Revenue Code of 1986 (relating to monthly

18 limitation) is amended to read as follows:

19 ‘‘(2) MONTHLY LIMITATION.—The monthly limitation for any month is the amount equal to 1 20 ⁄12 of

21 the annual deductible of the high deductible health

22 plan of the individual as of the first of such

23 month.’’.
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•S 657 IS

1 (2) CONFORMING AMENDMENT.—Section

2 220(d)(1)(A) of such Code is amended by striking

3 ‘‘75 percent of’’.

4 (e) EFFECTIVE DATES.—

5 (1) IN GENERAL.—Except as provided in para6 graph (2), the amendments made by this section

7 shall apply to months beginning after the date of en8 actment of this Act.

9 (2) COMPENSATION LIMIT REPEAL.—The

10 amendments made by subsection (b)(2)(A) shall

11 apply to taxable years beginning after December 31,

12 1999.

13 SEC. 3. REDUCTION IN HIGH DEDUCTIBLE PLAN MINIMUM

14 ANNUAL DEDUCTIBLE.

15 (a) IN GENERAL.—Section 220(c)(2)(A) of the Inter16 nal Revenue Code of 1986 (relating to high deductible

17 health plan) is amended—

18 (1) by striking ‘‘$1,500’’ in clause (i) (relating

19 to self-only coverage) and inserting ‘‘$1,000’’, and

20 (2) by striking ‘‘$3,000’’ in clause (ii) (relating

21 to family coverage) and inserting ‘‘$2,000’’.

22 (b) EFFECTIVE DATE.—The amendments made by

23 this section shall take effect on January 1, 2000.

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