American Future Healthcare Act of 2016

To amend the Internal Revenue Code of 1986 to expand health savings accounts, and for other purposes. 1. Short title This Act may be cited as the American Future Healthcare Act of 2016 2. Reform of Health Savings Accounts (a) Repeal of high deductible health plan requirement Section 223(a) (a) Deduction allowed In the case of an individual, there shall be allowed as a deduction for a taxable year an amount equal to the aggregate amount paid in cash during such taxable year by or on behalf of such individual to a health savings account of such individual. . (b) Increase in deductible HSA contribution limitations Section 223(b)(1) of such Code is amended by striking the sum of the monthly eligible individual $10,000 ($20,000 in the case of a joint return) (c) Medicare eligible individuals eligible To contribute to HSA Section 223(b) of such Code is amended by striking paragraph (7). (d) Purchase of health insurance Section 223(d)(2) of such Code is amended— (1) by striking subparagraphs (B) and (C), and (2) in subparagraph (A) by striking (A) In general The term The term (e) Cost-of-Living adjustment for catchup contributions Section 223(f)(1) of such Code (as redesignated by subsection (g)(3)) is amended by striking Each dollar amount in subsections (b)(2) and (c)(2)(A) In the case of a taxable year beginning after December 31, 2015, each dollar amount in paragraphs (1) and (2) of subsection (b) (f) Cost-of-Living adjustment indexed to CPI medical care component Section 223(f) (as so redesignated) is amended by adding at the end the following new paragraph: (3) CPI medical care component (A) In general For purposes of paragraph (1), the cost-of-living adjsutment determined under section 1(f)(3) for the calendar year shall be determined by substituting CPI medical care component CPI (B) CPI medical care component For purposes of subparagraph (A), the term CPI medical care component . (g) Conforming amendments (1) Section 223(b) of such Code is amended by striking paragraphs (2), (5), and (8) and by redesignating paragraphs (3), (4), and (6) as paragraphs (2), (3), and (4), respectively. (2) Section 223(b)(3) of such Code (as redesignated by paragraph (1)) is amended by striking the last sentence. (3) Section 223 of such Code is amended by striking subsection (c) and redesignating subsections (d) through (h) as subsections (c) through (g), respectively. (4) Section 223(c)(1)(A) of such Code (as redesignated by paragraph (3)) is amended— (A) by striking subsection (f)(5) subsection (e)(5) (B) in clause (ii) by striking the sum the dollar amount in effect under subsection (b)(1). (5) Section 223(f)(1) (as redesignated by paragraph (3)) is amended by striking calendar year 2003 calendar year 2014 (6) Section 26(b)(U) of such Code is amended by striking section 223(f)(4) section 223(e)(4) (7) Sections 35(g)(3), 220(f)(5)(A), 848(e)(1)(v), 4973(a)(5), and 6051(a)(12) of such Code are each amended by striking section 223(d) section 223(c) (8) Section 106(d)(1) of such Code is amended— (A) by striking who is an eligible individual (as defined in section 223(c)(1)) (B) by striking section 223(d) section 223(c) (9) Section 408(d)(9) of such Code is amended— (A) in subparagraph (A) by striking who is an eligible individual (as defined in section 223(c)) and (B) in subparagraph (C) by striking computed on the basis of the type of coverage under the high deductible health plan covering the individual at the time of the qualified HSA funding distribution (10) Section 877A(g)(6) of such Code is amended by striking 223(f)(4) 223(e)(4) (11) Section 4973(g) of such Code is amended— (A) by striking section 223(d) section 223(c) (B) in paragraph (2), by striking section 223(f)(2) section 223(e)(2) (C) by striking section 223(f)(3) section 223(e)(3) (12) Section 4975 of such Code is amended— (A) in subsection (c)(6)— (i) by striking section 223(d) section 223(c) (ii) by striking section 223(e)(2) section 223(d)(2) (B) in subsection (e)(1)(E), by striking section 223(d) section 223(c) (13) Section 6693(a)(2)(C) of such Code is amended by striking section 223(h) section 223(g) (h) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2015. 3. HSA Rollover to Medicare Advantage MSA (a) In general Section 138(b)(2) or or (C) a HSA rollover contribution described in subsection (d)(5), . (b) HSA rollover contribution Section 138(c) of such Code is amended by adding at the end the following new paragraph: (5) Rollover contribution An amount is described in this paragraph as a rollover contribution if it meets the requirement of subparagraphs (A) and (B). (A) In general The requirements of this subparagraph are met in the case of an amount paid or distributed from a health savings to the account beneficiary to the extent the amount is received is paid into a Medicare Advantage MSA of such beneficiary not later than the 60th day after the day on which the beneficiary receives the payment or distribution. (B) Limitation This paragraph shall not apply to any amount described in subparagraph (A) received by an individual from a health savings account if, at any time during the 1-year period ending on the day of such receipt, such individual received any other amount described in subparagraph (A) from a health savings account which was not includible in the individual’s gross income because of the application of section 223(e)(5)(A). . (c) Conforming amendment Section 223(e)(5)(A) of such Code, as amended by section 2, is amended by inserting or Medicare Advantage MSA into a health savings account (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2015.

Summary: American Future Healthcare Act of 2016 This bill amends the Internal Revenue Code, with respect to health savings accounts (HSAs), to: repeal the requirement that an individual making a tax deductible contribution to an HSA be covered by a high deductible health care plan; increase the maximum HSA contribution level; allow Medicare eligible individuals to contribute to an HSA; allow HSAs to be used to purchase health insurance; provide a cost-of-living adjustment for the limits on additional contributions for individuals 55 or older (catch-up contributions); require the cost-of-living adjustments to be indexed to the CPI medical care component (the medical care component for the Consumer Price Index for All Urban Consumers published by the Department of Labor); and allow a rollover of HSA amounts to a Medicare Advantage Medical Savings Account (MSA).