Freedom for Families Act

To amend the Internal Revenue Code of 1986 to allow for tax-advantaged distributions from health savings accounts during family or medical leave, and for other purposes. 1. Short title This Act may be cited as the Freedom for Families Act 2. Distributions from health savings accounts during periods of qualified caregiving (a) In general Paragraphs (1) and (2) of section 223(f) (1) Exclusion of amounts used for qualified medical expenses or distributed during periods of qualified caregiving Any amount paid or distributed out of a health savings account shall not be includible in gross income if it is— (A) used exclusively to pay qualified medical expenses of any account beneficiary, or (B) paid or distributed during a period of qualified caregiving. (2) Inclusion of amounts neither used for qualified medical expenses nor distributed during periods of qualified caregiving Any amount paid or distributed out of a health savings account shall be included in the gross income of the account beneficiary if it is not described in paragraph (1). . (b) Definition of period of qualified caregiving Section 223(f) (9) Period of qualified caregiving For purposes of this section, the term period of qualified caregiving . (c) Conforming amendments (1) Section 223(d)(1) of such Code is amended by inserting or the expenses incurred during a period of qualified caregiving of the account beneficiary paying the qualified medical expenses of the account beneficiary (2) Section 223(f)(4) of such Code is amended in the heading by striking distributions not used for qualified medical expenses certain distributions (d) Effective date The amendments made by this section shall apply with respect to taxable years beginning after the date of the enactment of this Act. 3. No high deductible health plan required for health savings accounts (a) In general Section 223(a) who is an eligible individual for any month during the taxable year (b) Conforming amendments (1) Section 223(b) of such Code is amended by striking paragraphs (7) and (8). (2) Section 223 of such Code is amended by striking subsection (c). (c) Increase in contribution limit for health savings accounts (1) In general Section 223(b)(1) the sum of the monthly eligible individual $9,000 (twice such amount in the case of a joint return) (2) Conforming amendments (A) Section 223(b) of such Code is amended by striking paragraphs (2), (3), and (5) and by redesignating paragraphs (4) and (6) as paragraphs (2) and (3), respectively. (B) Section 223(b)(2) of such Code (as redesignated by subparagraph (A)) is amended by striking the last sentence. (C) Section 223(d)(1)(A)(ii) is amended by striking the sum of the dollar amount in effect under subsection (b)(1). (D) Section 223(g)(1) of such Code is amended— (i) by striking Each dollar amount in subsections (b)(2) and (c)(2)(A) The dollar amount in subsection (b)(1) (ii) by striking thereof calendar year 2003 calendar year 1997 (iii) by striking under subsections (b)(2) and (c)(2)(A) under subsection (b)(1) (d) Effective date The amendments made by this section shall apply with respect to months in taxable years beginning after the date of the enactment of this Act.

Summary: Freedom for Families Act This bill modifies requirements for health savings accounts (HSAs) to (1) exclude from gross income HSA distributions paid or distributed during a period of qualified caregiving, (2) allow participation in an HSA without enrollment in a high deductible health plan, and (3) increase the contribution limit for HSAs.