I 

113TH CONGRESS 

2D SESSION H. R. 4777 

To amend the Internal Revenue Code of 1986 to modify rules relating to 

health savings accounts. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 30, 2014 

Mr. BURGESS introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on the 

Judiciary and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions 

as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Internal Revenue Code of 1986 to modify 

rules relating to health 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 ‘‘Health Savings Act 

5 of 2014’’. 

6 SEC. 2. HEALTH SAVINGS ACCOUNTS FOR CHILDREN. 

7 (a) IN GENERAL.—Section 223 of the Internal Rev8 enue Code of 1986 is amended by adding at the end the 

9 following new subsection: 


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1 ‘‘(h) CHILD HEALTH SAVINGS ACCOUNTS.— 

2 ‘‘(1) IN GENERAL.—In the case of an indi3 vidual, in addition to any deduction allowed under 

4 subsection (a) for any taxable year, there shall be al5 lowed as a deduction under this section an amount 

6 equal to the aggregate amount paid in cash by the 

7 taxpayer during the taxable year to a child health 

8 savings account of a child or grandchild of the tax9 payer. 

10 ‘‘(2) LIMITATIONS.— 

11 ‘‘(A) DEDUCTION LIMITATION.—The 

12 amount taken into account under paragraph (1) 

13 with respect to each child or grandchild of the 

14 taxpayer, as the case may be, for the taxable 

15 year shall not exceed the sum of the monthly 

16 limitations with respect to such child for 

17 months during the taxable year that the child 

18 is an eligible individual. 

19 ‘‘(B) LIMIT ON ACCOUNTS WITH RESPECT

20 TO INDIVIDUAL.—The aggregate amount of 

21 contributions which may be made for any tax22 able year to all child health savings accounts es23 tablished and maintained on behalf of a child 

24 shall not exceed the sum of the monthly limitaVerDate Mar 15 2010 03:54 Jun 05, 2014 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4777.IH H4777

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1 tions for months during the taxable year that 

2 the child is an eligible individual. 

3 ‘‘(C) MONTHLY LIMITATION.—The month4 ly limitation for any month with respect to a 

child is 1 5 ⁄12 of the amount in effect for the tax6 able year under subsection (c)(2)(A)(ii)(I). 

7 ‘‘(3) TREATMENT OF ACCOUNT WHILE A DE8 PENDENT.—For purposes of this section, except as 

9 otherwise provided in this subsection, a child health 

10 savings account established for the benefit of the 

11 child of a taxpayer shall be treated as a health sav12 ings account of the taxpayer until the first taxable 

13 year (and each taxable year thereafter) for which no 

14 deduction under section 151 is allowable to any tax15 payer with respect to such child, after which such 

16 account shall be treated as a health savings account 

17 of the child. 

18 ‘‘(4) CHILD HEALTH SAVINGS ACCOUNT.—For 

19 purposes of this subsection, the term ‘child health 

20 savings account’ means a health savings account 

21 designated as a child health savings account and es22 tablished for the benefit of a child of a taxpayer. 

23 ‘‘(5) QUALIFIED MEDICAL EXPENSES.—For 

24 purposes of this section, the term ‘qualified medical 

25 expenses’ shall, with respect to any child health savVerDate Mar 15 2010 03:54 Jun 05, 2014 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4777.IH H4777

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1 ings account, not include any amounts paid for med2 ical care (as defined in section 213(d)) for any indi3 vidual other than the child for whose benefit the ac4 count is maintained. 

5 ‘‘(6) EXCEPTIONS FOR DISABILITY OR DEATH

6 OF CHILD.—If the child becomes disabled within the 

7 meaning of section 72(m)(7) or dies— 

8 ‘‘(A) subsection (f)(4)(A) shall not apply to 

9 any subsequent payment or distribution, and 

10 ‘‘(B) the taxpayer may rollover the amount 

11 in such account to any health savings account 

12 of the taxpayer or grandparent of the child or 

13 to any child health savings account of any other 

14 child of the taxpayer. 

15 ‘‘(7) GUARDIANS.—Any legal guardian of a 

16 child shall be treated as the parent of such child for 

17 purposes of this section. 

18 ‘‘(8) REGULATIONS.—The Secretary shall pre19 scribe such regulations as may be necessary to carry 

20 out the purposes of this subsection, including rules 

21 for determining application of this subsection in the 

22 case of legal guardians and in the case of parents 

23 of a child who file separately, are separated, or are 

24 not married.’’. 


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1 (b) COORDINATION WITH MEANS-TESTED PRO2 GRAMS.—Amounts in a child health savings account shall 

3 not be taken into account in determining resources for 

4 purposes of title XIX of the Social Security Act. 

5 (c) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to taxable years beginning after 

7 the date of the enactment of this Act. 

8 SEC. 3. ALLOWING HSA ROLLOVER TO CHILD OR PARENT 

9 OF ACCOUNT HOLDER. 

10 (a) IN GENERAL.—Subparagraph (A) of section 

11 223(f)(8) of the Internal Revenue Code of 1986 is amend12 ed— 

13 (1) by inserting ‘‘child, parent, or grandparent’’ 

14 after ‘‘surviving spouse’’, 

15 (2) by inserting ‘‘child, parent, or grandparent, 

16 as the case may be,’’ after ‘‘the spouse’’, 

17 (3) by inserting ‘‘, CHILD, PARENT, OR GRAND18 PARENT’’ after ‘‘SPOUSE’’ in the heading thereof, 

19 and 

20 (4) by adding at the end the following: ‘‘In the 

21 case of a child who acquires such beneficiary’s inter22 est and with respect to whom a deduction under sec23 tion 151 is allowable to another taxpayer for a tax24 able year beginning in the calendar year in which 

25 such individual’s taxable year begins, such health 


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1 savings account shall be treated as a child health 

2 savings account of the child.’’. 

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

4 this section shall apply to taxable years beginning after 

5 the date of the enactment of this Act. 

6 SEC. 4. MAXIMUM CONTRIBUTION LIMIT TO HSA IN7 CREASED TO AMOUNT OF DEDUCTIBLE AND 

8 OUT-OF-POCKET LIMITATION. 

9 (a) SELF-ONLY COVERAGE.—Subparagraph (A) of 

10 section 223(b)(2) of the Internal Revenue Code of 1986 

11 is amended by striking ‘‘$2,250’’ and inserting ‘‘the 

12 amount in effect under subsection (c)(2)(A)(ii)(I)’’. 

13 (b) FAMILY COVERAGE.—Subparagraph (B) of sec14 tion 223(b)(2) of such Code is amended by striking 

15 ‘‘$4,500’’ and inserting ‘‘the amount in effect under sub16 section (c)(2)(A)(ii)(II)’’. 

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

18 this section shall apply to taxable years beginning after 

19 the date of the enactment of this Act. 

20 SEC. 5. TRANSFER OF REQUIRED MINIMUM DISTRIBUTION 

21 FROM RETIREMENT PLAN TO HEALTH SAV22 INGS ACCOUNT. 

23 (a) TRANSFER FROM RETIREMENT PLAN.— 

24 (1) INDIVIDUAL RETIREMENT ACCOUNTS.—Sec25 tion 408(d) of the Internal Revenue Code of 1986 


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1 is amended by adding at the end the following new 

2 paragraph: 

3 ‘‘(10) REQUIRED MINIMUM DISTRIBUTION

4 TRANSFERRED TO HEALTH SAVINGS ACCOUNT.— 

5 ‘‘(A) IN GENERAL.—In the case of an individual who has attained the age of 701 6 ⁄2 and 

7 who elects the application of this paragraph for 

8 a taxable year, gross income of the individual 

9 for the taxable year does not include a qualified 

10 HSA transfer to the extent such transfer is oth11 erwise includible in gross income. 

12 ‘‘(B) QUALIFIED HSA TRANSFER.—For 

13 purposes of this paragraph, the term ‘qualified 

14 HSA transfer’ means any distribution from an 

15 individual retirement plan— 

16 ‘‘(i) to a health savings account of the 

17 individual in a direct trustee-to-trustee 

18 transfer, 

19 ‘‘(ii) to the extent such distribution 

20 does not exceed the required minimum dis21 tribution determined under section 

22 401(a)(9) for the distribution calendar 

23 year ending during the taxable year. 

24 ‘‘(C) APPLICATION OF SECTION 72.—Not25 withstanding section 72, in determining the exVerDate Mar 15 2010 03:54 Jun 05, 2014 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4777.IH H4777

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1 tent to which an amount is treated as otherwise 

2 includible in gross for purposes of subparagraph 

3 (A), the aggregate amount distributed from an 

4 individual retirement plan shall be treated as 

5 includible in gross income to the extent that 

6 such amount does not exceed the aggregate 

7 amount which would have been so includible if 

8 all amounts from all individual retirement plans 

9 were distributed. Proper adjustments shall be 

10 made in applying section 72 to other distribu11 tions in such taxable year and subsequent tax12 able years. 

13 ‘‘(D) COORDINATION.—An election may 

14 not be made under subparagraph (A) for a tax15 able year for which an election is in effect 

16 under paragraph (9).’’. 

17 (2) OTHER RETIREMENT PLANS.—Section 402 

18 of the Internal Revenue Code of 1986 is amended by 

19 adding at the end the following new subsection: 

20 ‘‘(m) REQUIRED MINIMUM DISTRIBUTION TRANS21 FERRED TO HEALTH SAVINGS ACCOUNT.— 

22 ‘‘(1) IN GENERAL.—In the case of an individual 

who has attained the age of 701 23 ⁄2 and who elects the 

24 application of this subsection for a taxable year, 

25 gross income of the individual for the taxable year 


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1 does not include a qualified HSA transfer to the ex2 tent such transfer is otherwise includible in gross in3 come. 

4 ‘‘(2) QUALIFIED HSA TRANSFER.—For pur5 poses of this subsection, the term ‘qualified HSA 

6 transfer’ means any distribution from a retirement 

7 plan— 

8 ‘‘(A) to a health savings account of the in9 dividual in a direct trustee-to-trustee transfer, 

10 ‘‘(B) to the extent such distribution does 

11 not exceed the required minimum distribution 

12 determined under section 401(a)(9) for the dis13 tribution calendar year ending during the tax14 able year. 

15 ‘‘(3) APPLICATION OF SECTION 72.—Notwith16 standing section 72, in determining the extent to 

17 which an amount is treated as otherwise includible 

18 in gross for purposes of paragraph (1), the aggre19 gate amount distributed from an individual retire20 ment plan shall be treated as includible in gross in21 come to the extent that such amount does not exceed 

22 the aggregate amount which would have been so in23 cludible if all amounts from all individual retirement 

24 plans were distributed. Proper adjustments shall be 


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1 made in applying section 72 to other distributions in 

2 such taxable year and subsequent taxable years. 

3 ‘‘(4) ELIGIBLE RETIREMENT PLAN.—For pur4 poses of this subsection, the term ‘eligible retirement 

5 plan’ has the meaning given such term by subsection 

6 (c)(8)(B) (determined without regard to clauses (i) 

7 and (ii) thereof).’’. 

8 (b) TRANSFER TO HEALTH SAVINGS ACCOUNT.— 

9 (1) IN GENERAL.—Subparagraph (A) of section 

10 223(d)(1) of such Code is amended by striking ‘‘or’’ 

11 at the end of clause (i), by striking the period at the 

12 end of clause (ii)(II) and inserting ‘‘, or’’, and by 

13 adding at the end the following new clause: 

14 ‘‘(iii) unless it is in a qualified HSA 

15 transfer described in section 408(d)(10) or 

16 402(m).’’. 

17 (2) EXCISE TAX INAPPLICABLE TO QUALIFIED

18 HSA TRANSFER.—Paragraph (1) of section 4973(g) 

19 of such Code is amended by inserting ‘‘or in a quali20 fied HSA transfer described in section 408(d)(10) or 

21 402(m)’’ after ‘‘or 223(f)(5)’’. 

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

23 this section shall apply to distributions made after the 

24 date of the enactment of this Act. 


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1 SEC. 6. EQUIVALENT BANKRUPTCY PROTECTIONS FOR 

2 HEALTH SAVINGS ACCOUNTS AS RETIRE3 MENT FUNDS. 

4 (a) IN GENERAL.—Section 522 of title 11, United 

5 States Code, is amended by adding at the end the fol6 lowing new subsection: 

7 ‘‘(r) For purposes of this section, any health savings 

8 account (as described in section 223 of the Internal Rev9 enue Code of 1986) shall be treated in the same manner 

10 as an individual retirement account described in section 

11 408 of such Code.’’. 

12 (b) EFFECTIVE DATE.—The amendment made by 

13 this section shall apply to cases commencing under title 

14 11, United States Code, after the date of the enactment 

15 of this Act. 

16 SEC. 7. ALLOWANCE OF SILVER AND BRONZE PLANS IN 

17 CONNECTION WITH HEALTH SAVINGS AC18 COUNTS. 

19 (a) IN GENERAL.—Section 223 of the Internal Rev20 enue Code of 1986 is amended— 

21 (1) by striking ‘‘a high deductible health plan’’ 

22 each place it appears and inserting ‘‘an HSA com23 patible health plan’’, 

24 (2) by striking ‘‘high deductible health plan’’ in 

25 subsection (b)(8)(A)(ii) and inserting ‘‘HSA compat26 ible health plan’’, and 


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1 (3) by striking ‘‘the high deductible health 

2 plan’’ in subsection (c)(1)(A)(ii)(II) and inserting 

3 ‘‘the HSA compatible health plan’’. 

4 (b) HSA COMPATIBLE HEALTH PLAN DEFINED.— 

5 Paragraph (2) of section 223(c) of such Code is amended 

6 by redesignating subparagraphs (A), (B), (C), and (D) as 

7 subparagraphs (B), (C), (D), and (E) and by inserting 

8 before subparagraph (B), as so redesignated, the following 

9 new subparagraph: 

10 ‘‘(A) IN GENERAL.—The term ‘HSA com11 patible health plan’ means— 

12 ‘‘(i) any high deductible health plan, 

13 ‘‘(ii) any plan described in section 

14 1302(e) of the Patient Protection and Af15 fordable Care Act (relating to catastrophic 

16 plan), or 

17 ‘‘(iii) any silver or bronze plan which 

18 was enrolled in through an Exchange es19 tablished under section 1311 of the Patient 

20 Protection and Affordable Care Act.’’. 

21 (c) CLERICAL AMENDMENTS.—Section 223 of such 

22 Code is amended— 

23 (1) by striking ‘‘IN GENERAL’’ in the heading 

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1 section (b) of this Act, and inserting ‘‘HIGH DE2 DUCTIBLE HEALTH PLAN’’, 

3 (2) by striking ‘‘HIGH DEDUCTIBLE HEALTH

4 PLAN’’ in the heading for subsection (b)(8)(B) and 

5 inserting ‘‘HSA COMPATIBLE HEALTH PLAN’’, and 

6 (3) by striking ‘‘HIGH DEDUCTIBLE HEALTH

7 PLAN’’ in the heading for subsection (c)(2) and in8 serting ‘‘HSA COMPATIBLE HEALTH PLAN’’. 

9 (d) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to taxable years beginning after 

11 December 31, 2014. 

12 SEC. 8. IDENTIFICATION OF HSA COMPATIBLE PLANS. 

13 Section 1103(b) of the Patient Protection and Af14 fordable Care Act (42 U.S.C. 18003(b)) is amended by 

15 adding at the end the following new paragraph: 

16 ‘‘(3) IDENTIFICATION OF HSA COMPATIBLE

17 PLANS.—Beginning for plan year 2015, the format 

18 described in paragraph (1) shall require that infor19 mation on a coverage option described in subsection 

20 (a)(2) that is an HSA compatible health plan (as de21 fined in section 223(c)(2) of the Internal Revenue 

22 Code of 1986) identifies such plan as a plan that 

23 satisfies the requirement of section 223(c)(1)(A)(i) 

24 of such Code.’’. 

Æ 


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