I

107TH CONGRESS

1ST SESSION H. R. 1524

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

of Archer medical savings accounts.

IN THE HOUSE OF REPRESENTATIVES

APRIL 4, 2001

Mr. THOMAS (for himself, Mr. LIPINSKI, Mrs. JOHNSON of Connecticut, Mr.

PETERSON of Minnesota, Mr. CRANE, Mr. PHELPS, Mr. MCCRERY, Mr.

DEUTSCH, Mr. CAMP, Mr. HALL of Texas, Mr. RAMSTAD, Mr. LUCAS of

Kentucky, Mr. SAM JOHNSON of Texas, Ms. DUNN, Mr. ENGLISH, Mr.

HAYWORTH, Mr. MCINNIS, Mr. LEWIS of Kentucky, Mr. BRADY of

Texas, Mr. ARMEY, Mr. DELAY, Mr. MILLER of Florida, Mr. PAUL, Mr.

ROGERS of Michigan, Mr. FOSSELLA, Mr. TANCREDO, Mr. SCHAFFER,

Mr. WALSH, Mr. REYNOLDS, Mr. COOKSEY, Mr. SESSIONS, Mr. OSE, Ms.

HART, and Mrs. KELLY) 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 Archer 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 Availability Act of 2001’’.
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1 SEC. 2. EXPANSION OF AVAILABILITY OF ARCHER MEDICAL

2 SAVINGS ACCOUNTS.

3 (a) REPEAL OF LIMITATIONS ON NUMBER OF MED4 ICAL 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7 are hereby repealed.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 AMENDMENTS.—

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

10 such Code is amended by striking subparagraph

11 (D).

12 (B) Section 138 of such Code is amended

13 by striking subsection (f).

14 (b) AVAILABILITY NOT LIMITED TO ACCOUNTS FOR

15 EMPLOYEES OF SMALL EMPLOYERS AND SELF-EM16 PLOYED INDIVIDUALS.—

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

18 220(c)(1) of such Code (relating to eligible indi19 vidual) is amended to read as follows:

20 ‘‘(A) IN GENERAL.—The term ‘eligible in21 dividual’ means, with respect to any month, any

22 individual if—

23 ‘‘(i) such individual is covered under a

24 high deductible health plan as of the 1st

25 day of such month, and
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1 ‘‘(ii) such individual is not, while cov2 ered under a high deductible health plan,

3 covered under any health plan—

4 ‘‘(I) which is not a high deduct5 ible health plan, and

6 ‘‘(II) which provides coverage for

7 any benefit which is covered under the

8 high deductible health plan.’’.

9 (2) CONFORMING AMENDMENTS.—

10 (A) Section 220(c)(1) of such Code is

11 amended by striking subparagraph (C).

12 (B) Section 220(c) of such Code is amend13 ed by striking paragraph (4) (defining small

14 employer) and by redesignating paragraph (5)

15 as paragraph (4).

16 (C) Section 220(b) of such Code is amend17 ed by striking paragraph (4) (relating to deduc18 tion limited by compensation) and by redesig19 nating paragraphs (5), (6), and (7) as para20 graphs (4), (5), and (6), respectively.

21 (c) INCREASE IN AMOUNT OF DEDUCTION ALLOWED

22 FOR CONTRIBUTIONS TO MEDICAL SAVINGS ACCOUNTS.—

23 (1) IN GENERAL.—Paragraph (2) of section

24 220(b) of such Code is amended to read as follows:
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1 ‘‘(2) MONTHLY LIMITATION.—The monthly limitation for any month is the amount equal to 1 2 ⁄12 of

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

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

5 deductible health plan.’’.

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

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

8 striking ‘‘75 percent of’’.

9 (d) BOTH EMPLOYERS AND EMPLOYEES MAY CON10 TRIBUTE TO MEDICAL SAVINGS ACCOUNTS.—Paragraph

11 (4) of section 220(b) of such Code (as redesignated by

12 subsection (b)(2)(C)) is amended to read as follows:

13 ‘‘(4) COORDINATION WITH EXCLUSION FOR EM14 PLOYER CONTRIBUTIONS.—The limitation which

15 would (but for this paragraph) apply under this sub16 section to the taxpayer for any taxable year shall be

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

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

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

20 (e) REDUCTION OF PERMITTED DEDUCTIBLES

21 UNDER HIGH DEDUCTIBLE HEALTH PLANS.—

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

23 220(c)(2) of such Code (defining high deductible

24 health plan) is amended—
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1 (A) by striking ‘‘$1,500’’ in clause (i) and

2 inserting ‘‘$1,000’’; and

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

4 inserting ‘‘$2,000’’.

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

6 of section 220 of such Code is amended to read as

7 follows:

8 ‘‘(g) COST-OF-LIVING ADJUSTMENT.—

9 ‘‘(1) IN GENERAL.—In the case of any taxable

10 year beginning in a calendar year after 1998, each

11 dollar amount in subsection (c)(2) shall be increased

12 by an amount equal to—

13 ‘‘(A) such dollar amount, multiplied by

14 ‘‘(B) the cost-of-living adjustment deter15 mined under section 1(f)(3) for the calendar

16 year in which such taxable year begins by sub17 stituting ‘calendar year 1997’ for ‘calendar year

18 1992’ in subparagraph (B) thereof.

19 ‘‘(2) SPECIAL RULES.—In the case of the

20 $1,000 amount in subsection (c)(2)(A)(i) and the

21 $2,000 amount in subsection (c)(2)(A)(ii), para22 graph (1)(B) shall be applied by substituting ‘cal23 endar year 2000’ for ‘calendar year 1997’.

24 ‘‘(3) ROUNDING.—If any increase under para25 graph (1) or (2) is not a multiple of $50, such in-
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1 crease shall be rounded to the nearest multiple of

2 $50.’’.

3 (f) PROVIDING INCENTIVES FOR PREFERRED PRO4 VIDER ORGANIZATIONS TO OFFER MEDICAL SAVINGS AC5 COUNTS.—Clause (ii) of section 220(c)(2)(B) of such Code

6 is amended by striking ‘‘preventive care if’’ and all that

7 follows and inserting ‘‘preventive care.’’

8 (g) MEDICAL SAVINGS ACCOUNTS MAY BE OFFERED

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

10 125 of such Code is amended by striking ‘‘106(b),’’.

11 (h) EFFECTIVE DATE.—The amendments made by

12 this section shall apply to taxable years beginning after

13 December 31, 2001.

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