Health Savings Act of 2023

Subjects: Taxation

Summary:  <p><strong>Health Savings Act of 2023</strong></p> <p>This bill modifies the requirements for health savings accounts (HSAs) to</p> <ul> <li>rename high deductible health plans as HSA-qualified health plans; </li> <li>allow spouses who have both attained age 55 to make catch-up contributions to the same HSA; </li> <li>make Medicare Part A (hospital insurance benefits) beneficiaries eligible to participate in an HSA;</li> <li>allow individuals eligible for hospital care or medical services under a program of the Indian Health Service or a tribal organization to participate in an HSA; </li> <li>allow members of a health care sharing ministry to participate in an HSA; </li> <li>allow individuals who receive primary care services in exchange for a fixed periodic fee or payment, or who receive health care benefits from an on-site medical clinic of an employer, to participate in an HSA; </li> <li>include amounts paid for prescription and over-the-counter medicines or drugs as <i>qualified medical expenses</i> for which distributions from an HSA or other tax-preferred savings accounts may be used; </li> <li> increase the limits on HSA contributions to match the sum of the annual deductible and out-of-pocket expenses permitted under a high deductible health plan; and </li> <li>allow HSA distributions to be used to purchase health insurance coverage.</li> </ul> <p>The bill also (1) exempts HSAs from creditor claims in bankruptcy, and (2) reauthorizes Medicaid health opportunity accounts. </p> <p>The bill allows a medical care tax deduction for (1) exercise equipment, physical fitness programs, and membership at a fitness facility; (2) nutritional and dietary supplements; and (3) periodic fees paid to a primary care physician and amounts paid for pre-paid primary care services.</p>

<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1158 Introduced in Senate (IS)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                S. 1158

To amend the Internal Revenue Code of 1986 to improve access to health 
 care through expanded health savings accounts, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 30, 2023

Mr. Rubio (for himself and Mr. Scott of South Carolina) 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 improve access to health 
 care through expanded 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, ETC.

    (a) Short Title.--This Act may be cited as the ``Health Savings Act 
of 2023''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title, etc.
             TITLE I--RENAMING HIGH DEDUCTIBLE HEALTH PLANS

Sec. 101. High deductible health plans renamed HSA-qualified health 
                            plans.
      TITLE II--ENHANCING ACCESS TO TAX-PREFERRED HEALTH ACCOUNTS

Sec. 201. Allow both spouses to make catch-up contributions to the same 
                            HSA account.
Sec. 202. Provisions relating to Medicare.
Sec. 203. Individuals eligible for Indian Health Service assistance.
Sec. 204. Members of health care sharing ministries eligible to 
                            establish health savings accounts.
Sec. 205. Treatment of direct primary care service arrangements.
Sec. 206. Individuals eligible for on-site medical clinic coverage.
Sec. 207. Treatment of embedded deductibles.
   TITLE III--IMPROVING COVERAGE UNDER TAX-PREFERRED HEALTH ACCOUNTS

Sec. 301. Purchase of health insurance from HSA account.
Sec. 302. Special rule for certain medical expenses incurred before 
                            establishment of account.
Sec. 303. Preventive care prescription drug clarification.
  TITLE IV--MISCELLANEOUS PROVISIONS RELATING TO TAX-PREFERRED HEALTH 
                                ACCOUNTS

Sec. 401. FSA and HRA interaction with HSAs.
Sec. 402. Equivalent bankruptcy protections for health savings accounts 
                            as retirement funds.
Sec. 403. Administrative error correction before due date of return.
Sec. 404. Reauthorization of Medicaid health opportunity accounts.
Sec. 405. Maximum contribution limit to health savings account 
                            increased to amount of deductible and out-
                            of-pocket limitation.
                       TITLE V--OTHER PROVISIONS

Sec. 501. Certain exercise equipment and physical fitness programs 
                            treated as medical care.
Sec. 502. Certain nutritional and dietary supplements to be treated as 
                            medical care.
Sec. 503. Certain provider fees to be treated as medical care.

             TITLE I--RENAMING HIGH DEDUCTIBLE HEALTH PLANS

SEC. 101. HIGH DEDUCTIBLE HEALTH PLANS RENAMED HSA-QUALIFIED HEALTH 
              PLANS.

    (a) In General.--Section 223 is amended by striking ``high 
deductible health plan'' each place it appears and inserting ``HSA-
qualified health plan''.
    (b) Conforming Amendments.--
            (1) The heading for paragraph (2) of section 223(c) is 
        amended by striking ``High deductible health plan'' and 
        inserting ``HSA-qualified health plan''.
            (2) Section 408(d)(9) is amended--
                    (A) by striking ``high deductible health plan'' 
                each place it appears in subparagraph (C) and inserting 
                ``HSA-qualified health plan''; and
                    (B) by striking ``High deductible health plan'' in 
                the heading of subparagraph (D) and inserting ``HSA-
                qualified health plan''.
            (3) Section 106(e) is amended--
                    (A) by striking ``High deductible health plan'' in 
                the heading of paragraph (3) and inserting ``HSA-
                qualified health plan''; and
                    (B) by striking ``high deductible health plan'' in 
                paragraph (5)(B)(ii) and inserting ``HSA-qualified 
                health plan''.

      TITLE II--ENHANCING ACCESS TO TAX-PREFERRED HEALTH ACCOUNTS

SEC. 201. ALLOW BOTH SPOUSES TO MAKE CATCH-UP CONTRIBUTIONS TO THE SAME 
              HSA ACCOUNT.

    (a) In General.--Paragraph (5) of section 223(b) is amended to read 
as follows:
            ``(5) Special rule for married individuals with family 
        coverage.--
                    ``(A) In general.--In the case of individuals who 
                are married to each other, if both spouses are eligible 
                individuals and either spouse has family coverage under 
                an HSA-qualified health plan as of the first day of any 
                month--
                            ``(i) the limitation under paragraph (1) 
                        shall be applied by not taking into account any 
                        other HSA-qualified health plan coverage of 
                        either spouse (and if such spouses both have 
                        family coverage under separate HSA-qualified 
                        health plans, only one such coverage shall be 
                        taken into account),
                            ``(ii) such limitation (after application 
                        of clause (i)) shall be reduced by the 
                        aggregate amount paid to Archer MSAs of such 
                        spouses for the taxable year, and
                            ``(iii) such limitation (after application 
                        of clauses (i) and (ii)) shall be divided 
                        equally between such spouses unless they agree 
                        on a different division.
                    ``(B) Treatment of additional contribution 
                amounts.--If both spouses referred to in subparagraph 
                (A) have attained age 55 before the close of the 
                taxable year, the limitation referred to in 
                subparagraph (A)(iii) which is subject to division 
                between the spouses shall include the additional 
                contribution amounts determined under paragraph (3) for 
                both spouses. In any other case, any additional 
                contribution amount determined under paragraph (3) 
                shall not be taken into account under subparagraph 
                (A)(iii) and shall not be subject to division between 
                the spouses.''.
    (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. 202. PROVISIONS RELATING TO MEDICARE.

    (a) Individuals Over Age 65 Only Enrolled in Medicare Part A.--
Paragraph (7) of section 223(b) is amended by adding at the end the 
following: ``This paragraph shall not apply to any individual during 
any period for which the individual's only entitlement to such benefits 
is an entitlement to hospital insurance benefits under part A of title 
XVIII of such Act pursuant to an enrollment for such hospital insurance 
benefits under section 226(a) of such Act.''.
    (b) Medicare Beneficiaries Participating in Medicare Advantage MSA 
May Contribute Their Own Money to Their MSA.--Subsection (b) of section 
138 is amended by striking paragraph (2) and by redesignating 
paragraphs (3) and (4) as paragraphs (2) and (3), respectively.
    (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. 203. INDIVIDUALS ELIGIBLE FOR INDIAN HEALTH SERVICE ASSISTANCE.

    (a) In General.--Paragraph (1) of section 223(c) is amended by 
adding at the end the following new subparagraph:
                    ``(E) Special rule for individuals eligible for 
                assistance under indian health service programs.--For 
                purposes of subparagraph (A)(ii), an individual shall 
                not be treated as covered under a health plan described 
                in such subparagraph merely because the individual 
                receives hospital care or medical services under a 
                medical care program of the Indian Health Service or of 
                a tribal organization.''.
    (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. 204. MEMBERS OF HEALTH CARE SHARING MINISTRIES ELIGIBLE TO 
              ESTABLISH HEALTH SAVINGS ACCOUNTS.

    (a) In General.--Section 223 is amended by adding at the end the 
following new subsection:
    ``(i) Application to Health Care Sharing Ministries.--For purposes 
of this section, membership in a health care sharing ministry (as 
defined in section 5000A(d)(2)(B)(ii)) shall be treated as coverage 
under an HSA-qualified health plan.''.
    (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. 205. TREATMENT OF DIRECT PRIMARY CARE SERVICE ARRANGEMENTS.

    (a) In General.--Section 223(c) is amended by adding at the end the 
following new paragraph:
            ``(6) Treatment of direct primary care service 
        arrangements.--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--
                    ``(A) shall not be treated as a health plan for 
                purposes of paragraph (1)(A)(ii), and
                    ``(B) shall not be treated as insurance for 
                purposes of subsection (d)(2)(B).''.
    (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. 206. INDIVIDUALS ELIGIBLE FOR ON-SITE MEDICAL CLINIC COVERAGE.

    (a) In General.--Paragraph (1) of section 223(c), as amended by 
sections 203, is amended by adding at the end the following new 
subparagraph:
                    ``(F) Special rule for individuals eligible for on-
                site medical clinic coverage.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A)(ii), an individual shall not 
                        be treated as covered under a health plan 
                        described in such subparagraph merely because 
                        the individual is eligible to receive health 
                        care benefits from an on-site medical clinic of 
                        employer of the individual or the individual's 
                        spouse if such health care benefits are not 
                        significant benefits.
                            ``(ii) Included benefits.--For purposes of 
                        clause (i), the following health care benefits 
                        shall be considered to be benefits which are 
                        not significant benefits:
                                    ``(I) Physicals and immunizations.
                                    ``(II) Injecting antigens provided 
                                by employees.
                                    ``(III) Medications available 
                                without a prescription, such as pain 
                                relievers and antihistamines.
                                    ``(IV) Treatment for injuries 
                                occurring at the employer's place of 
                                employment or otherwise in the course 
                                of employment.
                                    ``(V) Tests for infectious diseases 
                                and conditions, such as streptococcal 
                                sore throat.
                                    ``(VI) Monitoring of chronic 
                                conditions, such as diabetes.
                                    ``(VII) Drug testing.
                                    ``(VIII) Hearing or vision 
                                screenings and related services.
                                    ``(IX) Other services and 
                                treatments of a similar nature to the 
                                services described in subclauses (I) 
                                through (VIII).
                            ``(iii) Aggregation rules.--For purposes of 
                        clause (i), all persons treated as a single 
                        employer under subsection (b), (c), (m), or (o) 
                        of section 414 shall be treated as a single 
                        employer.''.
    (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. 207. TREATMENT OF EMBEDDED DEDUCTIBLES.

    (a) In General.--Paragraph (2) of section 223(c) is amended by 
adding at the end the following new subparagraph:
                    ``(H) Treatment of embedded deductible.--A health 
                plan providing family coverage that has an annual 
                deductible for all covered individuals under the plan 
                of at least the amount described in subparagraph 
                (A)(i)(II) shall not fail to be treated as an HSA-
                qualified health plan solely because it covers expenses 
                with respect to an individual under that plan that 
                exceed an embedded deductible which is equal to or in 
                excess of the amount described in subparagraph 
                (A)(i)(I).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

   TITLE III--IMPROVING COVERAGE UNDER TAX-PREFERRED HEALTH ACCOUNTS

SEC. 301. PURCHASE OF HEALTH INSURANCE FROM HSA ACCOUNT.

    (a) In General.--Paragraph (2) of section 223(d) is amended--
            (1) 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'' in subparagraph (A) 
        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'';
            (2) by striking subparagraph (B) and inserting the 
        following:
                    ``(B) Health insurance may not be purchased from 
                account.--Except as provided in subparagraph (C), 
                subparagraph (A) shall not apply to any payment for 
                insurance.''; and
            (3) by striking ``or'' at the end of subparagraph (C)(iii) 
        and by striking subparagraph (C)(iv) and inserting the 
        following:
                            ``(iv) an HSA-qualified health plan, or
                            ``(v) any health insurance under title 
                        XVIII of the Social Security Act, other than a 
                        Medicare supplemental policy (as defined in 
                        section 1882 of such Act).''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to insurance purchased after the date of the 
enactment of this Act in taxable years beginning after such date.

SEC. 302. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES INCURRED BEFORE 
              ESTABLISHMENT OF ACCOUNT.

    (a) In General.--Paragraph (2) of section 223(d) is amended by 
adding at the end the following new subparagraph:
                    ``(E) Treatment of certain medical expenses 
                incurred before establishment of account.--If a health 
                savings account is established during the 60-day period 
                beginning on the date that coverage of the account 
                beneficiary under an HSA-qualified health plan begins, 
                then, solely for purposes of determining whether an 
                amount paid is used for a qualified medical expense, 
                such account shall be treated as having been 
                established on the date that such coverage begins.''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to coverage beginning after the date of the enactment of 
this Act.

SEC. 303. PREVENTIVE CARE PRESCRIPTION DRUG CLARIFICATION.

    (a) Clarify Use of Drugs in Preventive Care.--Subparagraph (C) of 
section 223(c)(2) is amended by adding at the end the following: 
``Preventive care shall include prescription and over-the-counter drugs 
and medicines which have the primary purpose of preventing the onset 
of, further deterioration from, or complications associated with 
chronic conditions, illnesses, or diseases.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2023.

  TITLE IV--MISCELLANEOUS PROVISIONS RELATING TO TAX-PREFERRED HEALTH 
                                ACCOUNTS

SEC. 401. FSA AND HRA INTERACTION WITH HSAS.

    (a) Eligible Individuals Include FSA and HRA Participants.--
Subparagraph (B) of section 223(c)(1) is amended--
            (1) by striking ``and'' at the end of clause (ii);
            (2) by striking the period at the end of clause (iii) and 
        inserting ``, and''; and
            (3) by inserting after clause (iii) the following new 
        clause:
                            ``(iv) coverage under a health flexible 
                        spending arrangement or a health reimbursement 
                        arrangement in the plan year a qualified HSA 
                        distribution as described in section 106(e) is 
                        made on behalf of the individual if, after the 
                        qualified HSA distribution is made and for the 
                        remaining duration of the plan year, the 
                        coverage provided under the arrangement is 
                        converted solely to one or more of the 
                        following:
                                    ``(I) Post-deductible fsa or hra.--
                                A health flexible spending arrangement 
                                or a health reimbursement arrangement 
                                that does not pay or reimburse any 
                                medical expense incurred before the 
                                minimum annual deductible under 
                                paragraph (2)(A)(i) (prorated for the 
                                period occurring after the qualified 
                                HSA distribution is made) is satisfied.
                                    ``(II) Preventative care.--A health 
                                flexible spending arrangement or a 
                                health reimbursement arrangement that, 
                                after the qualified HSA distribution is 
                                made, does not pay or reimburse any 
                                medical expense incurred after the 
                                qualified HSA distribution is made 
                                other than preventive care as defined 
                                in paragraph (2)(C).
                                    ``(III) Limited purpose health 
                                fsa.--A health flexible spending 
                                arrangement that, after the qualified 
                                HSA distribution is made, pays or 
                                reimburses benefits for coverage 
                                described in clause (ii) (but not 
                                through insurance or for long-term care 
                                services).
                                    ``(IV) Limited purpose hra.--A 
                                health reimbursement arrangement that, 
                                after the qualified HSA distribution is 
                                made, pays or reimburses benefits for 
                                permitted insurance or coverage 
                                described in clause (ii) (but not for 
                                long-term care services).
                                    ``(V) Retirement hra.--A health 
                                reimbursement arrangement that, after 
                                the qualified HSA distribution is made, 
                                pays or reimburses only those medical 
                                expenses incurred after an individual's 
                                retirement (and no expenses incurred 
                                before retirement).
                                    ``(VI) Suspended hra.--A health 
                                reimbursement arrangement that, after 
                                the qualified HSA distribution is made, 
                                is suspended, pursuant to an election 
                                made on or before the date the 
                                individual elects a qualified HSA 
                                distribution or, if later, on the date 
                                of the individual enrolls in an HSA-
                                qualified health plan, that does not 
                                pay or reimburse, at any time, any 
                                medical expense incurred during the 
                                suspension period except as described 
                                in the preceding subclauses of this 
                                clause.''.
    (b) Qualified HSA Distribution Shall Not Affect Flexible Spending 
Arrangement.--Paragraph (1) of section 106(e) is amended to read as 
follows:
            ``(1) In general.--A plan shall not fail to be treated as--
                    ``(A) a health flexible spending arrangement under 
                this section, section 105, or section 125,
                    ``(B) a health reimbursement arrangement under this 
                section or section 105, or
                    ``(C) an accident or health plan,
        merely because such plan provides for a qualified HSA 
        distribution.''.
    (c) FSA Balances at Year End Shall Not Forfeit.--Paragraph (2) of 
section 125(d) is amended by adding at the end the following new 
subparagraph:
                    ``(E) Exception for qualified hsa distributions.--
                Subparagraph (A) shall not apply to the extent that 
                there is an amount remaining in a health flexible 
                spending account at the end of a plan year that an 
                individual elects to contribute to a health savings 
                account pursuant to a qualified HSA distribution (as 
                defined in section 106(e)(2)).''.
    (d) Simplification of Limitations on FSA and HRA Rollovers.--
Paragraph (2) of section 106(e) is amended to read as follows:
            ``(2) Qualified hsa distribution.--
                    ``(A) In general.--The term `qualified HSA 
                distribution' means a distribution from a health 
                flexible spending arrangement or health reimbursement 
                arrangement directly to a health savings account of the 
                employee to the extent that such distribution does not 
                exceed the lesser of--
                            ``(i) the balance in such arrangement as of 
                        the date of such distribution, or
                            ``(ii) the amount determined under 
                        subparagraph (B).
                Such term shall not include more than 1 distribution 
                with respect to any arrangement.
                    ``(B) Dollar limitations.--
                            ``(i) Distributions from a health flexible 
                        spending arrangement.--A qualified HSA 
                        distribution from a health flexible spending 
                        arrangement shall not exceed the applicable 
                        amount.
                            ``(ii) Distributions from a health 
                        reimbursement arrangement.--A qualified HSA 
                        distribution from a health reimbursement 
                        arrangement shall not exceed--
                                    ``(I) the applicable amount divided 
                                by 12, multiplied by
                                    ``(II) the number of months during 
                                which the individual is a participant 
                                in the health reimbursement 
                                arrangement.
                            ``(iii) Applicable amount.--For purposes of 
                        this subparagraph, the applicable amount is--
                                    ``(I) $2,250 in the case of an 
                                eligible individual who has self-only 
                                coverage under an HSA-qualified health 
                                plan at the time of such distribution, 
                                and
                                    ``(II) $4,500 in the case of an 
                                eligible individual who has family 
                                coverage under an HSA-qualified health 
                                plan at the time of such 
                                distribution.''.
    (e) Elimination of Additional Tax for Failure To Maintain HSA-
Qualified Health Plan Coverage.--Subsection (e) of section 106, as 
amended by section 101, is amended--
            (1) by striking paragraph (3) and redesignating paragraphs 
        (4) and (5) as paragraphs (3) and (4), respectively, and
            (2) by striking subparagraph (A) of paragraph (3), as so 
        redesignated, and redesignating subparagraphs (B) and (C) of 
        such paragraph as subparagraphs (A) and (B) thereof, 
        respectively.
    (f) Limited Purpose FSAs and HRAs.--Subsection (e) of section 106, 
as amended by this section, is amended by adding at the end the 
following new paragraph:
            ``(5) Limited purpose fsas and hras.--A plan shall not fail 
        to be a health flexible spending arrangement, a health 
        reimbursement arrangement, or an accident or health plan under 
        this section or section 105 merely because the plan converts 
        coverage for individuals who enroll in an HSA-qualified health 
        plan described in section 223(c)(2) to coverage described in 
        subclause (I), (II), (III), (IV), (V), or (VI) of section 
        223(c)(1)(B)(iv). Coverage for such individuals may be 
        converted as of the date of enrollment in the HSA-qualified 
        health plan, without regard to the period of coverage under the 
        health flexible spending arrangement or health reimbursement 
        arrangement, and without requiring any change in coverage to 
        individuals who do not enroll in an HSA-qualified health 
        plan.''.
    (g) Distribution Amounts Adjusted for Cost-of-Living.--Subsection 
(e) of section 106, as amended by this section, is amended by adding at 
the end the following new paragraph:
            ``(6) Cost-of-living adjustment.--
                    ``(A) In general.--In the case of any taxable year 
                beginning in a calendar year after 2024, each of the 
                dollar amounts in paragraph (2)(B)(iii) shall be 
                increased by an amount equal to such dollar amount, 
                multiplied by the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                such taxable year begins by substituting `calendar year 
                2023' for `calendar year 2016' in subparagraph (A)(ii) 
                thereof.
                    ``(B) Rounding.--If any increase under paragraph 
                (1) is not a multiple of $50, such increase shall be 
                rounded to the nearest multiple of $50.''.
    (h) Disclaimer of Disqualifying Coverage.--Subparagraph (B) of 
section 223(c)(1), as amended by this section, is amended--
            (1) by striking ``and'' at the end of clause (iii);
            (2) by striking the period at the end of clause (iv) and 
        inserting ``, and''; and
            (3) by inserting after clause (iv) the following new 
        clause:
                            ``(v) any coverage (including prospective 
                        coverage) under a health plan that is not an 
                        HSA-qualified health plan which is disclaimed 
                        in writing, at the time of the creation or 
                        organization of the health savings account, 
                        including by execution of a trust described in 
                        subsection (d)(1) through a governing 
                        instrument that includes such a disclaimer, or 
                        by acceptance of an amendment to such a trust 
                        that includes such a disclaimer.''.
    (i) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 402. 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.

SEC. 403. ADMINISTRATIVE ERROR CORRECTION BEFORE DUE DATE OF RETURN.

    (a) In General.--Paragraph (4) of section 223(f) 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. 404. REAUTHORIZATION OF MEDICAID HEALTH OPPORTUNITY ACCOUNTS.

    (a) In General.--Section 1938 of the Social Security Act (42 U.S.C. 
1396u-8) is amended--
            (1) in subsection (a)--
                    (A) by striking paragraph (2) and inserting the 
                following:
            ``(2) Initial demonstration.--The Secretary shall approve 
        States to conduct demonstration programs under this section for 
        a 5-year period, with each State demonstration program covering 
        one or more geographic areas specified by the State. With 
        respect to a State, after the initial 5-year period of any 
        demonstration program conducted under this section by the 
        State, unless the Secretary finds, taking into account cost-
        effectiveness and quality of care, that the State demonstration 
        program has been unsuccessful, the demonstration program may be 
        extended or made permanent in the State.''; and
                    (B) in paragraph (3), in the matter preceding 
                subparagraph (A)--
                            (i) by striking ``not''; and
                            (ii) by striking ``unless'' and inserting 
                        ``if'';
            (2) in subsection (b)--
                    (A) in paragraph (3), by inserting ``clause (i) 
                through (vii), (viii) (without regard to the amendment 
                made by section 2004(c)(2) of Public Law 111-148), (x), 
                or (xi) of'' after ``described in''; and
                    (B) by striking paragraphs (4), (5), and (6);
            (3) in subsection (c)--
                    (A) by striking paragraphs (3) and (4);
                    (B) by redesignating paragraphs (5) through (8) as 
                paragraphs (3) through (6), respectively; and
                    (C) in paragraph (4) (as redesignated by 
                subparagraph (B)), by striking ``Subject to 
                subparagraphs (D) and (E)'' and inserting ``Subject to 
                subparagraph (D)''; and
            (4) in subsection (d)--
                    (A) in paragraph (2), by striking subparagraph (E); 
                and
                    (B) in paragraph (3)--
                            (i) in subparagraph (A)(ii), by striking 
                        ``Subject to subparagraph (B)(ii), in'' and 
                        inserting ``In''; and
                            (ii) by striking subparagraph (B) and 
                        inserting the following:
                    ``(B) Maintenance of health opportunity account 
                after becoming ineligible for public benefit.--
                Notwithstanding any other provision of law, if an 
                account holder of a health opportunity account becomes 
                ineligible for benefits under this title because of an 
                increase in income or assets--
                            ``(i) no additional contribution shall be 
                        made into the account under paragraph 
                        (2)(A)(i); and
                            ``(ii) the account shall remain available 
                        to the account holder for 3 years after the 
                        date on which the individual becomes ineligible 
                        for such benefits for withdrawals under the 
                        same terms and conditions as if the account 
                        holder remained eligible for such benefits, and 
                        such withdrawals shall be treated as medical 
                        assistance in accordance with subsection 
                        (c)(4).''.
    (b) Conforming Amendment.--Section 613 of Public Law 111-3 is 
repealed.

SEC. 405. MAXIMUM CONTRIBUTION LIMIT TO HEALTH SAVINGS ACCOUNT 
              INCREASED TO AMOUNT OF DEDUCTIBLE AND OUT-OF-POCKET 
              LIMITATION.

    (a) Self-Only Coverage.--Section 223(b)(2)(A) is amended by 
striking ``$2,250'' and inserting ``the amount in effect under 
subsection (c)(2)(A)(ii)(I)''.
    (b) Family Coverage.--Section 223(b)(2)(B) is amended by striking 
``$4,500'' and inserting ``the amount in effect under subsection 
(c)(2)(A)(ii)(II)''.
    (c) Conforming Amendments.--Section 223(g)(1) is amended--
            (1) by striking ``subsections (b)(2) and'' both places it 
        appears and inserting ``subsection''; and
            (2) by striking ``determined by'' in subparagraph (B) 
        thereof and all that follows through ```calendar year 2003'.'' 
        and inserting ``determined by substituting `calendar year 2003' 
        for `calendar year 2016' in subparagraph (A)(ii) thereof.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2023.

                       TITLE V--OTHER PROVISIONS

SEC. 501. CERTAIN EXERCISE EQUIPMENT AND PHYSICAL FITNESS PROGRAMS 
              TREATED AS MEDICAL CARE.

    (a) In General.--Subsection (d) of section 213 is amended by adding 
at the end the following new paragraph:
            ``(12) Exercise equipment and physical fitness activity.--
                    ``(A) In general.--The term `medical care' shall 
                include amounts paid--
                            ``(i) for equipment for use in a program 
                        (including a self-directed program) of physical 
                        exercise or physical activity,
                            ``(ii) to participate, or receive 
                        instruction, in a program of physical exercise, 
                        nutrition, or health coaching (including a 
                        self-directed program), and
                            ``(iii) for membership at a fitness 
                        facility.
                    ``(B) Overall dollar limitation.--
                            ``(i) In general.--Amounts treated as 
                        medical care under subparagraph (A) shall not 
                        exceed $1,000 with respect to any individual 
                        for any taxable year.
                            ``(ii) Exception.--Clause (i) shall not 
                        apply for purposes of determining whether 
                        expenses reimbursed through a health flexible 
                        spending arrangement subject to section 
                        125(i)(1) are incurred for medical care.
                    ``(C) Limitations related to sports and fitness 
                equipment.--Amounts paid for equipment described in 
                subparagraph (A)(i) shall be treated as medical care 
                only--
                            ``(i) if such equipment is utilized 
                        exclusively for participation in fitness, 
                        exercise, sport, or other physical activity 
                        programs,
                            ``(ii) if such equipment is not apparel or 
                        footwear, and
                            ``(iii) in the case of any item of sports 
                        equipment (other than exercise equipment), with 
                        respect to so much of the amount paid for such 
                        item as does not exceed $250.
                    ``(D) Fitness facility defined.--For purposes of 
                subparagraph (A)(iii), the term `fitness facility' 
                means a facility--
                            ``(i) providing instruction in a program of 
                        physical exercise, offering facilities for the 
                        preservation, maintenance, encouragement, or 
                        development of physical fitness, or serving as 
                        the site of such a program of a State or local 
                        government,
                            ``(ii) which is not a private club owned 
                        and operated by its members,
                            ``(iii) which does not offer golf, hunting, 
                        sailing, or riding facilities,
                            ``(iv) whose health or fitness facility is 
                        not incidental to its overall function and 
                        purpose, and
                            ``(v) which is fully compliant with the 
                        State of jurisdiction and Federal anti-
                        discrimination laws.''.
    (b) Limitation Not To Apply for Certain Purposes.--
            (1) Health savings accounts.--Subparagraph (A) of section 
        223(d)(2) is amended by inserting ``, determined without regard 
        to paragraph (12)(B) thereof'' after ``medical care (as defined 
        in section 213(d)''.
            (2) Archer msas.--Subparagraph (A) of section 220(d)(2) is 
        amended by inserting ``, determined without regard to paragraph 
        (12)(B) thereof'' after ``medical care (as defined in section 
        213(d)''.
    (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. 502. CERTAIN NUTRITIONAL AND DIETARY SUPPLEMENTS TO BE TREATED AS 
              MEDICAL CARE.

    (a) In General.--Subsection (d) of section 213, as amended by 
section 501, is amended by adding at the end the following new 
paragraph:
            ``(13) Nutritional and dietary supplements.--
                    ``(A) In general.--The term `medical care' shall 
                include amounts paid to purchase herbs, vitamins, 
                minerals, homeopathic remedies, meal replacement 
                products, and other dietary and nutritional 
                supplements.
                    ``(B) Limitation.--Amounts treated as medical care 
                under subparagraph (A) shall not exceed $1,000 with 
                respect to any individual for any taxable year.
                    ``(C) Meal replacement product.--For purposes of 
                this paragraph, the term `meal replacement product' 
                means any product that--
                            ``(i) is permitted to bear labeling making 
                        a claim described in section 403(r)(3) of the 
                        Federal Food, Drug, and Cosmetic Act, and
                            ``(ii) is permitted to claim under such 
                        section that such product is low in fat and is 
                        a good source of protein, fiber, and multiple 
                        essential vitamins and minerals.
                    ``(D) Exception.--Subparagraph (B) shall not apply 
                for purposes of determining whether expenses reimbursed 
                through a health flexible spending arrangement subject 
                to section 125(i)(1) are incurred for medical care.''.
    (b) Limitation Not To Apply for Certain Purposes.--
            (1) Health savings accounts.--Subparagraph (A) of section 
        223(d)(2), as amended by section 501, is amended by striking 
        ``paragraph (12)(B)'' and inserting ``paragraphs (12)(B) and 
        (13)(B)''.
            (2) Archer msas.--Subparagraph (A) of section 220(d)(2), as 
        amended by section 501, is amended by striking ``paragraph 
        (12)(B)'' and inserting ``paragraphs (12)(B) and (13)(B)''.
    (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. 503. CERTAIN PROVIDER FEES TO BE TREATED AS MEDICAL CARE.

    (a) In General.--Subsection (d) of section 213, as amended by 
sections 501 and 502, is amended by adding at the end the following new 
paragraph:
            ``(14) Periodic provider fees.--The term `medical care' 
        shall include--
                    ``(A) periodic fees paid to a primary care 
                physician for a defined set of medical services or the 
                right to receive medical services on an as-needed 
                basis, and
                    ``(B) pre-paid primary care services designed to 
                screen for, diagnose, cure, mitigate, treat, or prevent 
                disease and promote wellness.''.
    (b) Exception for Flexible Spending Accounts.--Section 125 is 
amended by redesignating subsections (k) and (l) as subsections (l) and 
(m), respectively, and by inserting after subsection (j) the following 
new subsection:
    ``(k) Special Rule With Respect to Health Flexible Spending 
Arrangements.--For purposes of applying this with respect to any health 
flexible spending arrangement, amounts described in section 213(d)(14) 
shall not be considered insurance.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
                                 &lt;all&gt;
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