I
105TH CONGRESS
1ST SESSION
H. R. 2465
To make medical savings accounts available in connection with certain health
plans under chapter 89 of title 5, United States Code, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 11, 1997
Mr. SALMON introduced the following bill; which was referred to the Commit-
tee on Government Reform and Oversight, and in addition to the Com-
mittee on Ways and Means, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
A BILL
To make medical savings accounts available in connection
with certain health plans under chapter 89 of title 5,
United States Code, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. PROVISIONS RELATING TO TITLE 5, UNITED
STATES CODE.
(a) ADDITIONAL PLANS.—
(1) IN
GENERAL.—Section 8903 of title 5,
United States Code, is amended by adding at the
end the following new paragraph:
‘‘(5) HIGH DEDUCTIBLE HEALTH PLANS.—One
or more plans described in paragraph (1), (2), (3),
or (4), which—
‘‘(A) are high deductible health plans (as
defined by section 220(c)(2) of the Internal
Revenue Code of 1986); and
‘‘(B) provide benefits of the types referred
to by section 8904(a)(5).’’.
(2) TYPES OF BENEFITS.—Section 8904(a) of
such title is amended by inserting after paragraph
(4) the following new paragraph:
‘‘(5) HIGH DEDUCTIBLE HEALTH PLANS.—Ben-
efits of the types named under paragraph (1) or (2)
of this subsection or both.’’.
(3) 
CONFORMING
AMENDMENT.—Section
8903a(a) of such title is amended by striking ‘‘sec-
tion.’’ and inserting ‘‘section (including plans de-
scribed by section 8903(5)).’’.
(b) CONTRIBUTIONS.—
(1) ALLOWING PAYMENT OF FULL AMOUNT OF
CHARGE FOR HIGH DEDUCTIBLE HEALTH PLAN.—
Section 
8906(b)(2) 
of 
title 
5, 
United
States Code, is amended by inserting ‘‘(or 100 per-
cent of the subscription charge in the case of a high
deductible health plan)’’ after ‘‘75 percent of the
subscription charge’’.
(2) GOVERNMENT CONTRIBUTION TO MEDICAL
SAVINGS ACCOUNTS.—Section 8906 of title 5, Unit-
ed States Code, is amended by adding at the end the
following new subsection:
‘‘(j)(1) In the case of an employee or annuitant who
is enrolled in a high deductible health plan, if the maxi-
mum Government contribution (as computed under sub-
section (b)(1)) exceeds the total subscription charge of the
plan in which the employee or annuitant is enrolled, then,
the excess shall be paid into such medical savings account
(of such employee or annuitant) as the employee or annu-
itant may designate.
‘‘(2) Contributions under this subsection shall be
made on the same biweekly (or other periodic) basis as
the Government contributions otherwise being made on be-
half of the employee or annuitant involved.
‘‘(3) For purposes of carrying out this subsection in
the case of an employee occupying a position on a part-
time career employment basis, the maximum Government
contribution shall be equal to the amount computed with
respect to such employee under subsection (b)(3).
‘‘(4) Subsections (f), (g), and (h) shall apply with re-
spect to contributions under this subsection.
‘‘(5) A designation under paragraph (1) shall be
made in such time and manner as the Office by regulation
requires.
‘‘(6) For the purpose of this subsection—
‘‘(A) the term ‘medical savings account’ has the
meaning given such term by section 220(d) of the
Internal Revenue Code of 1986; and
‘‘(B) the term ‘high deductible health plan’
means a high deductible health plan described by
section 8903(5).’’.
(3) DISREGARDING HIGH DEDUCTIBLE HEALTH
PLANS
IN
DETERMINING
LEVEL
OF
GOVERNMENT
CONTRIBUTIONS.—Section 8906(a) of such title is
amended—
(A) in paragraph (1) by striking ‘‘plan;’’
and inserting ‘‘plan described by section
8903(1);’’;
(B) in paragraph (2) by striking ‘‘plan;’’
and inserting ‘‘plan described by section
8903(2);’’;
(C) in paragraph (3) by inserting ‘‘de-
scribed by section 8903(3)’’ after ‘‘plans’’; and
(D) in paragraph (4) by inserting ‘‘de-
scribed by section 8903(4)’’ after ‘‘plans’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to contract years beginning after
December 31, 1997.
SEC. 2. PROVISIONS RELATING TO THE INTERNAL REVE-
NUE CODE OF 1986.
(a) IN GENERAL.—Section 220 of the Internal Reve-
nue Code of 1986 is amended by adding at the end the
following new subsection:
‘‘(k) FEDERAL
EMPLOYEES
HEALTH
BENEFIT
PLAN.—For purposes of this section—
‘‘(1) FEDERAL
GOVERNMENT.—The Federal
Government shall be treated as a small employer.
‘‘(2) LIMITATION ON DEDUCTION IN CASE OF
ANNUITANT, ETC.—Subparagraph (A) of subsection
(b)(4) shall not apply in the case of an individual
who elects coverage under section 8905 or 8905a of
title 5, United States Code, and who is enrolled in
a high deductible health plan under chapter 89 of
such title.
‘‘(3) COORDINATION WITH EXCLUSION FOR EM-
PLOYER
CONTRIBUTIONS.—The amount allowable
for a taxable year as a deduction under subsection
(a) to an individual described in paragraph (2) of
this subsection shall be reduced (but not below zero)
by the amount which would (but for section 106(b))
be includible in such individual’s gross income for
such taxable year. The limitation of the preceding
sentence shall be in lieu of the limitation of sub-
section (b)(5).
‘‘(4) NUMERICAL LIMITATIONS AND SUNSET.—
‘‘(A) Subsection (i) shall not apply to an
individual described in paragraph (2).
‘‘(B) Subsection (j) shall be applied with-
out regard to a medical savings account estab-
lished on behalf of an individual described in
paragraph (2).’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
December 31, 1997.
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