I 

118TH CONGRESS 

1ST SESSION H. R. 5687 

To amend the Internal Revenue Code of 1986 to modernize health savings 

accounts. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 26, 2023 

Ms. VAN DUYNE 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 modernize 

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 ‘‘HSA Modernization 

5 Act of 2023’’. 


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1 SEC. 2. INDIVIDUALS WITHOUT SERVICE-CONNECTED DIS2 ABILITY AND ELIGIBLE FOR CERTAIN VET3 ERANS BENEFITS PERMITTED TO CON4 TRIBUTE TO HEALTH SAVINGS ACCOUNTS. 

5 (a) IN GENERAL.—Section 223(c)(1)(C) of the Inter6 nal Revenue Code of 1986 is amended by striking ‘‘for 

7 a service-connected disability (within the meaning of sec8 tion 101(16) of title 38, United States Code)’’. 

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

10 this section shall apply to taxable years beginning after 

11 December 31, 2025. 

12 SEC. 3. INDIVIDUALS ENTITLED TO PART A OF MEDICARE 

13 BY REASON OF AGE ALLOWED TO CON14 TRIBUTE TO HEALTH SAVINGS ACCOUNTS. 

15 (a) IN GENERAL.—Section 223(c)(1)(B) of the Inter16 nal Revenue Code of 1986 is amended by striking ‘‘and’’ 

17 at the end of clause (ii), by striking the period at the end 

18 of clause (iii) and inserting ‘‘, and’’, and by adding at the 

19 end the following new clause: 

20 ‘‘(iv) entitlement to hospital insurance 

21 benefits under part A of title XVIII of the 

22 Social Security Act by reason of section 

23 226(a) of such Act.’’. 

24 (b) TREATMENT OF HEALTH INSURANCE PUR25 CHASED FROM ACCOUNT.—Section 223(d)(2)(C)(iv) of 

26 such Code is amended by inserting ‘‘and who is not an 


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1 eligible individual’’ after ‘‘who has attained the age speci2 fied in section 1811 of the Social Security Act’’. 

3 (c) COORDINATION WITH PENALTY ON DISTRIBU4 TIONS NOT USED FOR QUALIFIED MEDICAL EX5 PENSES.—Section 223(f)(4)(C) of such Code is amended 

6 by striking ‘‘Subparagraph (A)’’ and inserting ‘‘Except in 

7 the case of an eligible individual, subparagraph (A)’’. 

8 (d) CONFORMING AMENDMENT.—Section 223(b)(7) 

9 of such Code is amended by inserting ‘‘(other than an enti10 tlement to benefits described in subsection (c)(1)(B)(iv))’’ 

11 after ‘‘Social Security Act’’. 

12 (e) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to months beginning after Decem14 ber 31, 2025, in taxable years ending after such date. 

15 SEC. 4. INDIVIDUALS ELIGIBLE FOR INDIAN HEALTH SERV16 ICE ASSISTANCE NOT DISQUALIFIED FROM 

17 HEALTH SAVINGS ACCOUNTS. 

18 (a) IN GENERAL.—Section 223(c)(1) of the Internal 

19 Revenue Code of 1986 is amended by adding at the end 

20 the following new subparagraph: 

21 ‘‘(E) SPECIAL RULE FOR INDIVIDUALS EL22 IGIBLE FOR ASSISTANCE UNDER INDIAN

23 HEALTH SERVICE PROGRAMS.—For purposes of 

24 subparagraph (A)(ii), an individual shall not be 

25 treated as covered under a health plan deVerDate Sep 11 2014 19:03 Sep 28, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5687.IH H5687

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1 scribed in such subparagraph merely because 

2 the individual receives hospital care or medical 

3 services under a medical care program of the 

4 Indian Health Service or of a tribal organiza5 tion.’’. 

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

7 this section shall apply to taxable years beginning after 

8 December 31, 2025. 

9 SEC. 5. ALLOWANCE OF BRONZE AND CATASTROPHIC 

10 PLANS IN CONNECTION WITH HEALTH SAV11 INGS ACCOUNTS. 

12 (a) IN GENERAL.—Section 223(c)(2) of the Internal 

13 Revenue Code of 1986 is amended by adding at the end 

14 the following new subparagraph: 

15 ‘‘(H) BRONZE AND CATASTROPHIC PLANS

16 TREATED AS HIGH DEDUCTIBLE HEALTH

17 PLANS.—The term ‘high deductible health plan’ 

18 shall include any plan described in subsection 

19 (d)(1)(A) or (e) of section 1302 of the Patient 

20 Protection and Affordable Care Act.’’. 

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

22 this section shall apply to months beginning after Decem23 ber 31, 2025, in taxable years ending after such date. 


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1 SEC. 6. SAFE HARBOR FOR ABSENCE OF DEDUCTIBLE FOR 

2 MENTAL HEALTH SERVICES. 

3 (a) IN GENERAL.—Section 223(c)(2) of the Internal 

4 Revenue Code of 1986, as amended by this Act, is amend5 ed by adding at the end the following new subparagraph: 

6 ‘‘(I) SAFE HARBOR FOR ABSENCE OF DE7 DUCTIBLE FOR MENTAL HEALTH SERVICES.—A 

8 plan shall not fail to be treated as a high de9 ductible health plan by reason of failing to have 

10 a deductible for not more than the first $500 

11 of any mental health benefits (as defined in sec12 tion 9812(e)(4)) specified by the plan for pur13 poses of this subparagraph.’’. 

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

15 this section shall apply to plan years beginning after De16 cember 31, 2025. 

17 SEC. 7. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES 

18 INCURRED BEFORE ESTABLISHMENT OF 

19 HEALTH SAVINGS ACCOUNT. 

20 (a) IN GENERAL.—Section 223(d)(2) of the Internal 

21 Revenue Code of 1986 is amended by adding at the end 

22 the following new subparagraph: 

23 ‘‘(E) TREATMENT OF CERTAIN MEDICAL

24 EXPENSES INCURRED BEFORE ESTABLISHMENT

25 OF ACCOUNT.—If a health savings account is 

26 established during the 60-day period beginning 


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1 on the date that coverage of the account bene2 ficiary under a high deductible health plan be3 gins, then, solely for purposes of determining 

4 whether an amount paid is used for a qualified 

5 medical expense, such account shall be treated 

6 as having been established on the date that 

7 such coverage begins.’’. 

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

9 this section shall apply with respect to coverage beginning 

10 after December 31, 2025. 

11 SEC. 8. ALLOW BOTH SPOUSES TO MAKE CATCH-UP CON12 TRIBUTIONS TO THE SAME HEALTH SAVINGS 

13 ACCOUNT. 

14 (a) IN GENERAL.—Section 223(b)(5) of the Internal 

15 Revenue Code of 1986 is amended to read as follows: 

16 ‘‘(5) SPECIAL RULE FOR MARRIED INDIVIDUALS

17 WITH FAMILY COVERAGE.— 

18 ‘‘(A) IN GENERAL.—In the case of individ19 uals who are married to each other, if both 

20 spouses are eligible individuals and either 

21 spouse has family coverage under a high de22 ductible health plan as of the first day of any 

23 month— 

24 ‘‘(i) the limitation under paragraph 

25 (1) shall be applied by not taking into acVerDate Sep 11 2014 22:56 Sep 27, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5687.IH H5687

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1 count any other high deductible health 

2 plan coverage of either spouse (and if such 

3 spouses both have family coverage under 

4 separate high deductible health plans, only 

5 one such coverage shall be taken into ac6 count), 

7 ‘‘(ii) such limitation (after application 

8 of clause (i)) shall be reduced by the ag9 gregate amount paid to Archer MSAs of 

10 such spouses for the taxable year, and 

11 ‘‘(iii) such limitation (after application 

12 of clauses (i) and (ii)) shall be divided 

13 equally between such spouses unless they 

14 agree on a different division. 

15 ‘‘(B) TREATMENT OF ADDITIONAL CON16 TRIBUTION AMOUNTS.—If both spouses referred 

17 to in subparagraph (A) have attained age 55 

18 before the close of the taxable year, the limita19 tion referred to in subparagraph (A)(iii) which 

20 is subject to division between the spouses shall 

21 include the additional contribution amounts de22 termined under paragraph (3) for both spouses. 

23 In any other case, any additional contribution 

24 amount determined under paragraph (3) shall 

25 not be taken into account under subparagraph 


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1 (A)(iii) and shall not be subject to division be2 tween the spouses.’’. 

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

4 this section shall apply to taxable years beginning after 

5 December 31, 2025. 

6 SEC. 9. MAXIMUM CONTRIBUTION LIMIT TO HEALTH SAV7 INGS ACCOUNT INCREASED TO AMOUNT OF 

8 DEDUCTIBLE AND OUT-OF-POCKET LIMITA9 TION. 

10 (a) SELF-ONLY COVERAGE.—Section 223(b)(2)(A) 

11 of the Internal Revenue Code of 1986 is amended by strik12 ing ‘‘$2,250’’ and inserting ‘‘the amount in effect under 

13 subsection (c)(2)(A)(ii)(I)’’. 

14 (b) FAMILY COVERAGE.—Section 223(b)(2)(B) of 

15 such Code is amended by striking ‘‘$4,500’’ and inserting 

16 ‘‘the amount in effect under subsection (c)(2)(A)(ii)(II)’’. 

17 (c) CONFORMING AMENDMENTS.—Section 223(g)(1) 

18 of such Code is amended— 

19 (1) by striking ‘‘subsections (b)(2) and’’ both 

20 places it appears and inserting ‘‘subsection’’, and 

21 (2) in subparagraph (B), by striking ‘‘deter22 mined by’’ and all that follows through ‘‘ ‘calendar 

23 year 2003’.’’ and inserting ‘‘determined by sub24 stituting ‘calendar year 2003’ for ‘calendar year 

25 2016’ in subparagraph (A)(ii) thereof.’’. 


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

2 this section shall apply to taxable years beginning after 

3 December 31, 2025. 

4 SEC. 10. CLARIFICATION OF TREATMENT OF DISTRIBU5 TIONS FROM HEALTH SAVINGS ACCOUNT 

6 FOR LONG-TERM CARE SERVICES. 

7 (a) IN GENERAL.—Section 223(d)(2)(A) of the Inter8 nal Revenue Code of 1986 is amended by inserting before 

9 the last sentence the following: ‘‘Such term includes 

10 amounts paid for qualified long-term care services (as de11 fined in section 7702B(c)).’’. 

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

13 this subsection shall apply to amounts paid after the date 

14 of the enactment of this Act. 

15 (c) NO INFERENCE.—Nothing contained in this sec16 tion or the amendment made thereby shall be construed 

17 to create any inference with respect to any amounts paid 

18 on or before such date. 

Æ 


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